As noted in the above YouTube video, a recent Ipsos Reid survey revealed that 56% of Ontarians mistakenly believe HST applies to the full purchase price of resale homes. The survey was commissioned by the Ontario Real Estate Association in an effort to convince the Ontario government to launch a public awareness campaign to educate taxpayers and put an end to the confusion.
The video interview goes on to say, "Based on this research families are putting off the decision to move. They actually think that they just can't afford it. Everyone has a dream of home ownership and if they're putting it off because they think they can't afford it based on a misconception about HST that's a real shame."
I personally haven't noticed a downturn in my own business or a reluctance by my clients to make a move because of the HST. That doesn't mean it isn't happening though... Many realtors are saying that they're feeling a negative impact.
So, how do we combat the confusion? By educating our clients as to when the HST actually applies! Here's a quick breakdown:
- HST does NOT apply on the purchase price of re-sale homes.
- HST DOES apply to services such as legal fees, home inspection fees, appraisal fees, labour for renovations, landscaping and real estate commissions, if applicable.
- It is estimated the average home buyer will likely pay $1200 - $1500 additional cost in HST fees when moving.
- HST applies to the purchase price of newly constructed homes. However, the Province is proposing a rebate so that new homes across all price ranges would receive a 75 % rebate of the provincial portion of the single sales tax on the first $400,000. (so that's basically a savings up to the first $24,000 hst)
- For new homes under $400,000, this would mean, on average, no additional tax amount compared to the current system
If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.