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