Home buyers', including first time home buyers' planning to buy Mississauga Real Estate, Toronto Real Estate or Oakville On Real Estate will face higher costs if Premier McGinty's recent out loud musings of harmonizing the Provincial Sales Tax (PST) with the Federal Goods and Service Tax (GST) come into effect.
At the moment most goods and services are subject to 5% Federal GST. In addition to that there is an 8% PST, however some goods and services are exempt. Premier McGinty wants to "harmonize" these two taxes into one tax of 13%.
Sounds harmless. ...............Right?
Except as a homebuyer you will have the costs of a home inspection, a bank appraisal and lawyer's fees all of which are, at this time not subject to the PST.
Under McGinty's "harmonization" plan they will no longer be exempt.
That means an additional 8 % out of your pocket.
What Will It Cost You
The following are examples of these costs today, and under harmonization:
Home Inspection Today @ $350 X 5% GST = $17.50
Under Tax Harmonization @ $350 X 13% GST + PST = $45.50
Increase = $28.00
Home Appraisal Today @ $400 X 5% GST = $20.00
Under Tax Harmonization @ $400 X 13% GST + PST = $52.00
Increase = $32.00
Lawyer Fees Today @ $1200 X 5% GST = $60.00
Under Tax Harmonization @ $1200 X 13% GST + PST = $156.00
Increase = $96.00
Commission on sale of home today @$300,000 x 5% = $15,000 x 5% GST = $750.00
Under Tax Harmonization @ $300,000 x 5% = $15,000 X 13% GST + PST = $1950.00
Increase = $1200.00
Total Increased Taxes = $1384.00
Harmonization ? ................................................. Or Tax Grab?
The Artful Dodger would be proud. McGinty has graduated from Pickpocket School with flying colours.
The Ontario government has repeatedly rejected past calls to harmonize the PST with the GST, saying it would add taxes to items that are currently exempt such as books and feminine hygiene products as well as services such as those outlined above.
That's what residents of Nova Scotia discovered in the first year of their not-so-harmonious harmonized tax. A study showed citizens there paid an extra $84 million for the privilege.
Call your local member of Ontario Provincial Parliament and let them know you will punish them at the voting booth if they harmonize the PST and GST. You can find your MPP by clicking on or copying and pasting the link below. If you don't know who your MPP is, there is also a link to find your constituency, and from there your MPP.
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