The HST - it's the new buzz word going around. Since many of my clients ask how the new HST affects them, I thought I would try to simplify how the HST will affect real estate transactions.
What is the HST?
The HST or the Harmonized Sales Tax is a combined levy of 13% that will replace the 8% PST (Provincial Sales Tas) and the 5% GST (Goods and Services Tax). It is a provincial tax so, it will affect the purchase and sales of real estate in Ontario. This Tax comes into effect on July 1, 2010.
From a Real Estate point of view, what will be taxed?
This tax will add about $2000 to the cost of buying/selling a home. GST used to apply to services such as realtors commission, lawyers fees, home inspection fees, moving costs and appraisal fees. After the new HST comes into effect, these services will now be charged 13% HST verses the old 5% GST.
What will be the impact on Condos?
Consumers need to know that condo fees themselves are not subject to HST, however, service costs from the condominium corporation such as concierge, cleaning companies, and mechanical repairs will have HST applied to them.
Examples of Services pertaining to buying a home and how the HST will affect those costs
It is always best to get legal advice from your accountant or tax specialist.