* The following information is from the Toronto Real Estate Board (TREB)
Background / Provincial Budget Details
The Budget presented by the provincial government on March 26, 2009 announced that the Province will be moving ahead with harmonizing the GST and PST, scheduled to take effect on July 10, 2010. Combing these taxes into a single Harmonized Sales Tax (HST) could have implications for home buyers, including:
- adding significant tax to services such as moving costs, legal fees, home inspection fees, mortgage insurance premiums, title insurance, and REALTOR® commissions; and,
- adding significant tax to the purchase price of newly constructed homes priced over $400,000.
HST - New Homes
- Newly constructed homes under $400,000 would not be subject to an additional tax burden.
- A proportional rebate will be available for buyers of new homes valued between $400,000 and $500,000.
HST - Resale Homes
- HST would not be applied on the purchase price of resale homes
- However, this Budget makes no exemption for services associated with resale home transactions. Under the proposed sales tax harmonization, costs such as legal fees, real estate commissions and home inspection fees will be subject to the harmonized sales tax at a rate of 13 per cent.
Eric's Opinion Below
As you know we are currently within a recession. I find it hard to beleive that our provinicial government instead of stimulating the economy to dig us out of a recession is adding a further burdon to us all. Especially if you buy or sell a home. All services you purchase will cost you an additional 8%. Think about that. All your utility hookups, services, legal fees, commissions, contractors, inspections, plus any service items you purchase for your home will now cost 8% more. But that is not all, in some parts of Ontario you cannot purchase much of a home for under 400K. Anything over 400K will be taxed. The cost of new homes will increase because most all of the costs that a builder will inccur to build a home, example: Labour will be taxed 8% more. That will have to be passed onto the consumer. Plus the additional cost will be incurred within the Land Transfer tax. Wow!
Are we not taxed enough? Most people I speak to find it difficult enough to get by day to day. Another 8% on services may just put a number of people over the edge.
Contact your local Provincial Member of Parliament and voice your concerns. What is your opinion?