Please take note:

Just a quick update :

So many people are asking if there are exceptions to the charge. The HST will be charged on Commisions.

What I can determine is as follows:

• If the deal is firmed up before july 1 and closes after July 1 – 5% gst is charged 
• If the deal is 90% done before July 1 , and firms up  after that  possible 5% depending on what needs to be completed.

• Otherwise anything after July 1 is 13%

$200,000 @ 5% commission  is $ 10,000.00  .This is split four ways  ( Buyer, Agent, Seller Agent, Buyers Broker, Sellers Broker )

HST would be13% or $ 1300.00 cdn funds.

Please access all government web sites in first HST article. New Homes tend to be a bit more complicated . There is a grandfather clause which I have not covered. This depend on how much of the home is constructed before and after.

Hope these three HST articles assist you with your planning,

carl

The HST will not be on Condo Fees. However the unfortunate thing is most of the components of a Condo Fee are made up of services. Landscaping, Maintenance and Repair. As of July 1st These services will have HST 8% which is added to the 5%( GST) . The total tax is 13%. I understand water may not have HST but have not verified this.

So it is safe to say you will see budgets " stretched" and yes Condo Fees will increase by around 5% to 8%. There will be pressure on contractors to lower their prices as well.

So yes there is HST ( sort of ) ,

Carl  

I wanted to post some general information on HST. Many people are asking questions  so I hope this clears things up.

HST is 13% . It is considered value added Tax.  

If you are Selling your home:

Real Estate Agents who normally charge 5% GST on commissions will have to charge 13%. This is regarding resale homes and is on the commission only. This  will be on July 1, 2010. There are some exceptions but on a regular resale home. This is the tax that would apply.

If you are buying a Resale home extra costs will be incurred HST will be charged on home inspections, legal services, high ratio mortgage premiums, fire insurance premiums.

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

______________________________________________________________

RE new Homes:  Builders would use the same process they use with regard to GST. The Buyer must qualify for the rebate. ( The new home would be a primary residence )  Clarify your HST before signing on the dotted line and read the fine print.

Under the HST, new homes worth less than $400,000 will qualify for a 6% tax rebate, but new homes worth more than $400,000 will be subject to an additional 8% tax. To explain if a buyer pays $500,000 the net tax would be $ 16,000.00 after receiving the rebate of $ 24,000.00

Here are some helpful Links.

http://www.servicecanada.gc.ca/eng/goc/gst_new_housing.shtml

http://www.fin.gov.on.ca/english/index.html

http://www.rev.gov.on.ca/english/guides/rst/206.html

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html

All information deemed reliable but not guaranteed.  Please seek the advise of your tax professional and contact government agency to clarify your costs. As I  deal with residential resales it appears the impact will be minimal. I encourage real estate to be a long term investment.  Hope this information helps.

Carl