IMPECT OF HST FROM JULY01,2010 IN ONTARION REAL ESTATE MARKET

From July 1, 2010 Ontarians have to pay a harmonized sales tax (HST) rate of 13% on a long list goods and services including previously exempted services and goods from the 8% Provincial Sales Tax (PST).How important the dream of homeownership is to the families in Ontario or at any other geographical arena on the glob. Unfortunately, thanks to the forthcoming HST, that dream is going to become much more expensive. After July 1, 2010, every residential real estate transaction in Ontario will face a significant tax increase. Specifically, home buyers and sellers can expect to pay 8% more on legal fees, appraisals, real estate commissions, condo fees, rent, home inspection fees, moving costs and the provincial government's recently introduced system of mandatory home energy audits. According to the Ontario Real Estate Association (OREA) Ontarians will pay, on average, an additional $1,500 in new taxes on their next residential real estate transaction.If the new taxes on real estate transactions are not bad enough, a HST will add 8% more tax on a series of home related costs.  Specifically, a HST will add hundreds, potentially thousands of dollars in additional tax on utility bills, such as gas, electricity and home heating fuel, on home renovation labour, the cost of lawn upkeep or landscaping and the cost of snow removal. Moreover, a HST will increase the cost of living with 8% more tax on gasoline, personal and professional services, meals under $4, dry cleaning, cab fares, magazine subscriptions, plane tickets, vitamins and cell phone charges.  HST will reduce the purchase power of the people of Ontario and thereby, the quality of life by taking more of their hard earned money to fund government initiatives.  

Jayesh Bhavsar

Jayesh Bhavsar

Broker
CENTURY 21 New Star Realty Inc., Brokerage*
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