New HST Means Big Tax Increase for Buyers, Sellers and Home Owners

Effective July 1, 2010, home buyers and sellers will pay 8 per cent more on legal fees, appraisals, real estate commissions, home inspection fees, and moving costs, adding about $1,500 in new taxes to the average residential real estate transaction in Ontario.

For homeowners the HST will also add hundreds 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.

QUOTES:

"The Government of Ontario can try to sell the HST any number of ways but starting July 1, 2010 the taxes on buying, selling and owning a home in our province will go up," said Pauline Aunger, President of OREA.

"Ontario's housing market is vital to the health of our provincial economy," said President Aunger. "An HST on homeownership will reduce housing affordability and increase the tax burden for Ontario families."

"In the last decade, Ontario's homeowners have faced a barrage of government imposed costs," said President Aunger. "From municipal land transfer taxes to sky rocketing property taxes and now the HST, homeowners are once again being forced to foot the bill for this government's legislative agenda."

QUICK FACTS:

The HST combines the PST and GST into one value added tax, meaning that the 8 per cent PST will be applied to list of goods and services that were previously exempt. The government plans to begin charging the HST to consumers on July 1, 2010.

OREA estimates that the new tax will add $1,449 in new taxes to an average resale home costing $302,354. OREA also estimates that the HST will add an estimated $262 million in new taxes annually to residential resale real estate transactions.

Homeowners will also have to pay an additional 8 per cent on many services required to maintain their homes. These services were previously exempt from PST and include utilities, home renovation labour, landscaping, snow removal and many others. OREA estimates HST on these services will add $480 in annual tax to the homeowner (based on a family that budgets $500 per month for such costs).

Ontario's real estate industry is essential to the provincial economy. In 2008, real estate in Ontario accounted for $56.6 billion in sales, $6.01 billion in ancillary economic spending and $1.35 billion in land transfer tax revenue to the provincial government. In addition, independent research indicates that resale housing market creates 80,000 direct and indirect jobs.

Stay up to date with all real estate news by following my blog at www.seankavanagh.ca

SOURCE:CNW Group Ltd.

Sean Kavanagh

Sean Kavanagh

Sales Representative
CENTURY 21 Miller Real Estate Ltd., Brokerage*
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