Harmonized Sales Tax - Reality check

Okay i'm no tax expert, but lately i have had a lot of questions and comments directed my way that indicates the new Harmonized Sales Tax (HST) is not understood by consumers. I cannot answer a lot of detailed or complicated questions on the subject, but I can dispell a couple of common myths I have been coming across.

First - Residential resale houses and condominiums in Ontario and Toronto are NOT subject to the new HST - check out the Government of Ontario site to confirm this and other important facts. Second - Newly purchsed homes and condominiums ARE subject to HST, though there are some complicated change over rules and helpful rebates that take some of the sting out of the change. If buying new check in with your lawyer and or accountant to make sure you understand how this tax change will affect you.

The primary impact buyers and sellers of residential resale properties will experience are the services they must purhcase to support their real estate needs will now be taxed at a higher rate.

For example home inspectors, lawyers, home stagers, and realtors all must add the HST to our bills, an additional 8% above and beyond the current GST... so yes it will hurt to some degree but it could have been a lot worse... when buying the HST may add between $100 to $200 to the purchasing costs. For sellers the sting is a bit more as the Realtor Fee's are the most expensive selling cost and this could add anywhere from $1000 to several thousand dollars depending on the price of the house.

If you have detailed questions about the HST, especially if buying new or if you are a builder or investor, I recommend you speak to your accountant or your real estate lawyer.