Buyers’ details on the new HST

Will the new harmonized tax affect our condo purchase?

Q. After six years of scrimping and saving, my wife and I have are ready to buy our first home, a condo. Will the new harmonized tax affect our condo purchase?
— Jason and Terri

A. Ontario’s budget announced a replacement of the current Ontario sales tax (eight per cent) and the federal Goods and Services Tax (five per cent) with a 13 per cent Harmonized Sales Tax (HST). The new HST will apply to the purchase of new homes in Ontario beginning July 1, 2010.

This is not a welcome tax for the housing industry and homebuyers alike. The HST will effectively add 13 per cent of the sale price for a new home.

The province’s original announcement in March offered full rebates for homes priced $400,000 or less and partial rebates between $400,000 to $500,000, then completely phased out greater than $500,000.

However, the premier’s announcement on June 19 made slight changes and will provide rebates on the first $400,000 price of all homes including higher priced houses.

The current five-per-cent GST would apply to closings prior to July 1, 2010.

– Henry Choo Chong, CGA, can be reached at choochonghcga@yahoo.ca and 416-485-5225.

 
 
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