HST and Real Estate in Ontario

There have been several questions over the past few months on “How will the new HST affect the resale market.” I wanted to try and show on paper the cost to both the buyer and seller on a typical single family home in Peterborough selling for $225,000.

 

 

Below are the costs to the buyer in this transaction with a down payment of 5%:

Taxable

Service

Current Tax

Payable

HST Tax

New Taxes

Total

Payable

Mortgage Insurance Premiums

$336.66

$538.65

$875.31

Legal Costs

$50.00

$80.00

$130.00

Home Inspection

$16.25

$26.00

$42.25

Title Insurance

$24.00

$15.00

$39.00

Total

$426.91

$659.65

$1086.56

In the above example the buyer purchasing a resale home at a cost of $225,000, with 5% down on a 35 year amortization will pay an additional $659.65 in taxes than they are currently paying (not including moving costs, additional taces for utilities and heat, etc.)

 

Below are the additional costs in taxes to the seller on the same transaction:

Taxable

Service

Current Tax

Payable

HST Tax

New Taxes

Total

Payable

Real Estate

Commission

$562.50

$900.00

$1462.50

Legal Costs

$50.00

$80.00

$130.00

Total

$612.50

$980.00

$1592.50

In the above example, the seller would have $980.00 in new HST taxes, based on a selling price of $225,000 with a commission of 5% (not including moving costs, additional taces for utilities and heat, etc.)

 

It’s important to understand how HST will affect our business as well as your next purchase or sale.  There is widespread misperception that the HST will be added to total purchase price of a resale, which is not the case. This only applies to certain types of New Home Construction.

For more information on how HST will affect you whether purchasing a new or a resale home, or selling your home in the Province of Ontario after July 1st,2010, please click HERE:

 

 

No Question Is Wrong, What Matters Is You Get The Right Answer!

Crystal Edwards

Sales Representative

Century 21 United Realty Inc. Brokerage

Independently Owned and Operated

www.twitter.com/CrystalEdC21

Crystal Edwards

Crystal Edwards

Sales Representative
CENTURY 21 United Realty Inc., Brokerage*
Contact Me

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