The new Ontario budget proposes merging the federal GST and 8% provincial sales tax into a 13% Harmonized Sales Tax.

The Ontario Real Estate Association claims that this will add about $2,000 to the cost of a resale house priced at $360,000, with rising legal fees, moving costs, commissions and home inspection costs.

What are people's thoughts on this new tax? How do you think it will affect your business?

The tax will spur people into activity when you consider that it will be added to the cost of homes that are constructed Post July 2010.

This will create a mini construction boom of smaller homes to be under the $400,000 cap.

Are you saying that buyers have to pay the Harmonized Sales Tax (HST) for "resale" houses (or, Used Houses to be more exact)? If the answer is yes, I am going to disagree with it because used merchandise should be tax-free, such as the ones we always buy after sellers put ads in Bargain Finder newspapers are tax-free (e.g. second-hand fridges, second-hand TVs, and any other second-hand things). HST for new houses is a different story... and I agree with it.

We disagree with taxes on the sale of a car, yet the government of Ontario collects GST and PST each time it is resold?

Who can we call?

The harmonized sales tax in Ontario will have a number of effects. First, new home sales over the $400,000 exception will have staggered exemptions of the extra 8% tax. The Ontario Home Builders Association estimates that over 40% of all new homes sold in the province will be affected by this new tax and that buyers will be subjected to many thousands of dollars in new taxation. Definitely not a boon to construction jobs.

Secondly, every commission paid to brokers across the province will now be subject to additional taxation. What would have been $500 in taxes on a $10,000 commission will become $1,300 in taxes for the same service. There will be no new added benefit to the consumer for this, just higher fees.

The Ontario Real Estate Association is strongly opposed to this new tax scheme, and you should be too! Call your MPP and make it clear that you are also opposed.

Please take a minute to read my post on this very topic on my blog: http://ocreblog.blogspot.com/2009/05/tax-harmonization-in-ontario-big-grab.html

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