How the HST affects real estate transactions in Ontario

Here is a list of the Top 10 things to know about the new HST and how it affects real estate transactions in Ontario:

• The HST stands for "Harmonized Sales Tax".  The 13% tax combines the current 5% GST and 8% PST.
• HST does not apply to the resale purchase of a home but does apply to the sale of a newly built home.
• On newly built homes, the government will provide a 75% rebate on the provincial portion of the tax up to a maximum of $24,000.  What this means is that for newly built houses under $400,000, there is no change in how much tax would currently be paid.
• The HST does apply to realtors' commissions.  This means that the seller will be paying 13% tax on the commission instead of the current 5%.
• The HST does apply to lawyer fees.
• The HST does apply to moving fees.
• The HST does apply to home inspections.
• There is no HST charged on condo fees or rental fees.  (However, these fees may eventually increase as landowners pass on their increased expenses.)
• There is no change on the price of a condo status certificate.  Even though HST applies, there is a legislated $100 maximum which will not be exceeded.

This article was brought to you by Kanata Real Estate Agent, David Haynes.