I’m kind of surprised that in the course of day-to-day business, not too many people are talking yet about the impact of the new Harmonized Sales Tax (HST) on a real estate transaction. As the July 1, 2010 implementation date draws closer, I’m sure it will become a major issue.
The new tax has its merits in respect to manufacturing in particular but quite frankly, I see it as a real tax grab when it comes to things like real estate. The government will be generating revenue that did not previously exist. We already pay land transfer upon the sale of property so really, it’s a form of double taxation and I’m seeing red over it myself.
In a news release issued by the President of our local real estate board, a number of points are made:
“As real estate professionals, REALTORS® know how important the dream of homeownership is to Ontario families. Unfortunately, thanks to the forthcoming HST, that dream is going to become much more expensive… home Buyers and Sellers can expect to pay 8% more on legal fees, appraisals, real estate commissions, condo fees, home inspection fees, moving costs and the provincial government’s recently introduced system of mandatory home energy audits. According to the Ontario Real Estate Association (OREA) Ontarians will pay, on average, an additional $1,449 in new taxes on their next residential real estate transaction. “
The release continues, “… HST will add hundreds, potentially thousands of dollars in additional tax on utility bills, such as gas, electricity and home heating fuel, on home renovation labour, the cost of lawn upkeep or landscaping and the cost of snow removal. Moreover, a HST will increase the cost of living with 8% more tax on gasoline, personal and professional services, meals under $4, dry cleaning, cab fares, magazine subscriptions, plane tickets, vitamins and cell phone charges.”
When you consider that real estate and home ownership are major drivers in our economy, I’m shocked that the government has not softened the blow in this sector. If you are concerned, write to your MPP and tell them that Ontarians do not need higher taxes on homeownership.
Marg Scheben-Edey is a Broker with RE/MAX four seasons realty limited, Brokerage in beautiful Collingwood, ON. With three decades of experience, Marg is a leader in the local real estate marketplace and is ready to help guide both Buyers and Sellers in achieving their real estate goals. Email Marg