It has recently been brought to my attention that there is still considerable confusion as to Ontario's new HST and what it applies to. I found the results of a recent Ipsos Reid survey regarding HST and the resale housing market to be very surprising. I wanted to share this information with you in an attempt to help rectify this situation.
This theory seems to be supported by a recent survey commissioned by the Ontario Real Estate Association (OREA) and conducted by Ipsos Reid, which shows that 56% of people in Ontario believe that the new HST applies to the cost of resale homes.
“Clearly, Ontarians still don’t know what the HST covers and what is exempt,” said OREA president Dorothy Mason. “This is not helping the housing market, and it’s not helping the Ontario economy. This confusion means that many buyers think the cost of a resale home is tens of thousands of dollars higher than it actually is.”
With the average resale home price sitting at $333,000 in Ontario, this means that many would expect to pay an additional $40,000 in sales tax if they bought a home at that value. The reality is that there is no HST collected on the full purchase price of a resale home. In fact the HST is only levied on the various transaction fees associated with the purchase of a home that has been previously occupied (i.e. not a newly-built home).
So the good news is that HST is not collected on the sale price of your resale (previously owned) home. The bad news is HST is now charged on real estate commissions and legal costs charged by your real estate lawyer. I have added a link to a previous blog of mine which takes you to the Ontario Government Site that lists everything HST applicable.http://rebeccajames64.blogspot.com/2010/05/hst-in-ontario.html They even have a smartphone app. that will tell you what is HST taxable! I hope this help clear the HST confusion and brings more buyers to the real estate market.
