Whether we like it or not in Ontario HST is heading our way. The Canadian Real Estate Association has thrown a couple of curve balls at HST train, however, it’s not likely to be derailed and even if it’s watered down a little, it’s coming! So how is this likely to affect the consumer? Well just about everything related to completing a real estate transaction attracts GST, and hence at least the same categories will attract HST. Such items as your lawyers fees, Realtors fees, the home inspection, the soon to be introduced (strongly suggested) energy audit, and moving costs to name a few will be subject to the new 13% tax. Buying a new home! Ouch! Although not set in stone my current understanding is that new homes over the thresh hold of $400,000 will be subject to the new tax while those under will only pay the existing tax. However, if you are buying a $400,000 home that’s still an extra $32k on top just for the extra tax piece. If you substantially renovate a home, particularly if you are building out a home office or you are acting as a ‘flipping’ business, do too much and claim input tax credits and you could be setting yourself up for an HST grab when you sell. (Check with your accountant before beginning any project that could put you at risk) The Ontario Real Estate Association is estimating that on an average home purchase of an existing residential property the extra costs to the consumer for support services will reach an average of $1500. In addition annual maintenance of a home due to snow removal services, home renovation labour utility costs etc will add approx. $480 a year to the household expense budget due to the new tax. All in all the consumer is going to lose out. The new tax is due to be introduced ┬áin July 2010, so if you are considering buying a new home over the thresh hold of $400,000 you may want to be in touch with your builder sooner rather than later! I’ll keep you updated as I am certain this will unfold in even greater confusion as the deadline nears. Oh, and if you happen to be speaking to your local MP or political party representative, you may want to thank him or her for their attention to the extra burden this will place on the population at large, just what we need as we try to recover from a recession! Back soon, regards to all, Ian Hocking

Filed under: BarrieBarrie Real EstateDistrictEsssaInnisfilOro MedonteSnow ValleySpringwaterUncategorized

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