S e r v i c e . I n t e g r i t y . R e s u l t s .

The PDF document put out by the Province of Ontario outlines common products and services and how they will be affect by the new HST. I found it to be a very useful reference.

What’s Taxable under the HST and what’s not?

Here is an update regarding HST and its impact on real estate that I thought may interest you.

The government is following the lead of Quebec, New Brunswick, Nova Scotia and Newfoundland and Labrador by harmonizing the 5 per cent GST and the 8 per cent PST into one blended tax – the HST or harmonized sales tax – that will add 13 per cent to a wide range of items and services that weren’t covered by the provincial levy in the past.

The Harmonized sales tax looms on the housing horizon. This tax is coming into effect on July 1st 2010. The HST will apply to new homes and to all home closing costs, thereby increasing the cost of everything.
The effect of this harmonized HST tax on real estate transactions is as follows:

1.  Rents on leases are exempt.

2.  Resale homes are exempt.

3.  The new tax will apply to ‘new housing’ – there will be a rebate of  75% of the provincial component for new homes priced under $400,000.The rebate would be reduced for new homes priced between $400,000 to $500,000 range, and would not be available for homes priced at more than $500,000. On all new housing over $500,000, the full HST tax of 13% will apply.

4.Sales of used owner-occupied homes are usually exempt. In most cases, the GST/HST does not apply to the sale of an owner occupied home since the owner is not a builder. Only homes sold by builders are taxable.

5. Newly build AND resale home sales, there will be an increase in ‘professional service’ costs – real estate commissions will increase with the current GST tax going from 5% to an HST tax at 13%.  Also increased will be the costs of: home inspection, mortgage insurance premiums, legal costs, title insurance, landscaping and house cleaning services, cost of labour for installations or repairs, additions, renovations, driveways, fences and swimming pools!