With just another month to go before the HST comes into full effect, the rush to beat the HST continues.
There's no doubt that uncertainty is still hovering the topic of this new tax. So, here's a quick summary of the effects it will have on buyers and sellers come July 1.
New homes priced up to $400,000 – Buyers will not experience any impact here. Any rebates under the current tax system will most likely be matched when the new system kicks in. One thing buyers should be aware of, however, is the tax on legal fees will be affected with increase by 8%.
New homes priced over $400,000 – Buyers will be required to pay 8% more than under the current system. However, if the new home is for use as a primary residence, it will be eligible for the new housing rebate to a maximum of $24,000.
Sellers would need to pay an extra 8% on both real estate fees and legal fees.
The Canada Revenue Agency issues information that is helpful regarding this matter. They particularly have a notice, Harmonized Sales Tax for Ontario – Questions and Answers on Housing Rebates and Transitional Rules for Housing and Other Real Property Situated in Ontario, which I find quite informative.
Also, to find out what is HST taxable and what’s not, click here. There is a chart you can download which will give you an idea of what is taxable and what isn't from July 1 onwards.