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AVOID THE HST - Buy A Home Now!

Friday, March 9, 2018   /   by Ruth Ballantyne

AVOID THE HST - Buy A Home Now!

The following appeared in the Brampton Guardian  today.

Avoid the HST – Buy a home now


The new harmonized sales tax being implemented in Ontario may end up being a friend of business but for consumers buying a new house prepare to be stung.


The HST will combine the current GST (5 per cent) and PST (8 per cent) to create one tax, HST at (13 per cent). This tax will apply to new homes and to many home closing costs, adding to the cost of a resale home and thousands to the cost of a brand new home.


Under the current system many of the services associated with the purchase of a resale home are only charged the 5 per cent GST. This means that mortgage insurance premiums, legal costs, real estate commissions, home inspections and title insurance will now all have an additional 8 per cent tax.


This chart, supplied by the Ontario Real Estate Association illustrates how closing costs on a resale home will be affected. (Based on a single detached home priced at $360,000.)


Table 1:


Taxable Service                             Current Tax Payable       New Taxes        HST Tax Payable


Mortgage Insurance Premiums      $752.40                            $470.25                   $1222.65


Legal Costs                                           $50                                     $80                         $130


Real Estate Fee/Commission            $720                                  $1,152.00                 $1,872.00


Home Inspection                                  $20.00                                $32.00                     $52.00


Title Insurance                                     $24.00                              $15.00                         $39.00



                             Total New Tax: $1,749.25-$2,325.25


 


The purchase of a new home will be hit even harder but thanks to lobbying efforts from many sources including the Home Builders Association and the Ontario Real Estate Association, the proposed HST on new homes will not be as severe as first proposed. The government has revised the rebate for new homes as 75 per cent of the provincial portion of the HST payable to a maximum rebate of $24,000. Originally the 75 per cent rebate only applied to houses under $400,000. This means an added tax of $6000 on a new $500,000 home. In May, as part of the Brampton Real Estate Boards Government Relations Advisory Council, we took our opposition to all of the MPPs in our area to ensure they understood the impact that this tax will have on homeowners and the real estate industry. The Brampton Real Estate Board opposes the HST because it will hurt the affordability of housing. You will pay significantly more to close on an existing home or to purchase a new home under the HST system that comes into effect in July 2010. So avoid the tax, if you are thinking of buying a home or moving up this year do it now and avoid the HST.


-Ruth Ballantyne


http://zoominlocal.com/ml-brampton-guardian/2010/01/13/#?article=722598


For more information on the new HST please visit: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html


 

Ballantyne Professionals | RE/MAX Realty Services Inc.
Ruth Ballantyne
295 Queen Street E
Brampton, ON L6W 3R1
905-456-1000

Information is provided exclusively for consumers’ personal use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Data is deemed reliable, but is not guaranteed accurate by the MLS®.
Information is provided exclusively for consumers’ personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Data is deemed reliable, but is not guaranteed accurate by the MLS®. Copyright 2021 Last Updated July 29, 2021
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