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

www.durhamregionhomesforsale.ca [url=http://www.durhamregionhomesforsale.ca]Durham Region Homes For Sale[/url]

Hey guys,

I just wrote an article on how the HST is going to be impacting real estate sales towards the end of this year. I'd love to get some of your comments on my blog. (I hope this isn't spammy?) Much of a TD report was cited in the article.

http://www.housebulb.com/wp-admin/post.php?action=edit&post=100

I'm going to post the link again now that i've got the ability to create links. I wish I could just edit the posting as the link isn't actually the right one... If the admins read this, please delete the above post by me, please.

Home Prices in Canada Expected to Cool.

Personally I'm surprised by the number of people wanting to close deals to beat the HST. I mean it really only impacts new builds over $400,000.

I don't think that the added cost of the HST on the services related to a transation amounts to much, especially when you spread it over 25 years.

I have had to have this conversation with many clients who are freaked out by what the media is portraying. On a $200,000 resale home with 5% commission, the difference to the Seller will be $800 (8% on the $10,000 commission) which will simply be reflected in the final sale price. The buyers will have the additional 8% only on such things as home inspections, legal fees, etc. You're really only looking at about a $1000 difference on a $200,000 sale all combined. Now, if you are selling new builds in Toronto then you might have some concern. Around here we rarely deal in new home sales and if we do, they certainly won't be over $400,000.

[quote=MHT]I have had to have this conversation with many clients who are freaked out by what the media is portraying.[/quote]

Really amazing how much bad information on the HST there is out there. It's driving some sales so we are happy for the business, personnally I'd prefer people wait to find the "perfect" home rather than 1 that's "ok" to save a few bucks.

[quote=MHT]You're really only looking at about a $1000 difference on a $200,000 sale all combined.[/quote]

And that's probably going to be paid over 25 years.

[quote=MHT] Now, if you are selling new builds in Toronto then you might have some concern. Around here we rarely deal in new home sales and if we do, they certainly won't be over $400,000. [/quote]

Even then they are stilling going to be rebating the portion under $400,000 to a lot of people. Of course I've heard that the builders are getting that amount signed over to them.

Personally I think that the HST is a good move on part of the government, and really not all that big of a deal.

It's going to be good for small business. I'm looking forward to getting all of my taxes refunded on business expenses as opposed to just the GST.

Agreed. I was going to purchase a new car, until I released it would be better to wait a few more months so I'll be able to get the full HST rebated and not just the current GST.

Other than outline the impacts, it's not a topic to discuss with clients in detail.