From the blog...

Real Estate and HST

Recently, I have had a few questions come up regarding HST and how it applies to house purchases in Ontario.  To make sure it is clear, I have included in this blog all the information you need to know.

The biggest change that took effect when the HST came into being was to effectively add more tax to services.  Services used to attract GST only – but not PST.  With the blended tax (HST), the tax now applies (13%) to all services.  When buying a home, this could relate to such things as legal services, home inspection services, commissions, etc.

If you are buying a resale home:

There is actually no HST on a resale transaction so if you are not buying a brand new home, do consider the HST on any related services, but you don’t have to worry about it when it comes to the sale price of the home.

If you are purchasing a brand new home:

• An Enhanced New Housing Rebate means that buyers of new homes receive a rebate of up to $24,000 regardless of the price of the new home
• Buyers of homes priced up to $400,000 (about three-quarters of new homes built in Ontario) on average, pay no more – and possibly even less – tax than under the PST system.
• On new homes over $400,000, additional tax only applies to the portion of the price above $400,000. For example, if a new house was priced at $450,000, additional tax would only be applicable on $50,000
• Most builders include any HST in the advertised or contracted price of the new home
• Since December 14, 2007, the Ontario government has extended a land transfer tax refund of up to $2,000 to first time buyers of resale homes

If you have any questions, please give me a call at 613-721-4206.

Chris