HST is going to put Barrie and Ontario home ownership out of reach for many

By
Real Estate Agent with sales representative : Keller Williams Experience Realty

Sales tax harmonization draws closer - why is this old news?

 

    CNW/ - Ontario's REALTORS(R) say the McGuinty
governments plan to harmonize the GST and PST will add over $2,000 to the cost
of a real estate transaction, hurting the resale home market and prolonging
the housing industry's recovery from the current economic downturn.
"Now is not the time to be erecting barriers to homeownership," said
Pauline Aunger, President of the Ontario Real Estate Association. "We need
consumers to invest in housing to help get our economy going again."
According to the Canadian Real Estate Association, home sales in the
province of Ontario were down 29 per cent in February, compared to 2008.
Under a harmonized sales tax (HST), home buyers and sellers will have to
pay extra tax on a range of services associated with real estate transactions
such as legal fees, moving costs, real estate commissions and home inspection
fees. Currently, consumers only pay the 5% Goods and Services Tax (GST) on
these services. "These additional taxes could price some homebuyers, especially
first-time homebuyers, right out of the market," explained Mrs. Aunger.
"Harmonizing will not help homebuyers in any way."
For a resale house priced at $360,000, a HST could add over two thousand
dollars in new taxes to closing costs. In total, a HST will add $313 million
annually in new taxes to resale home transactions.
"In the last decade, Ontario's homeowners have faced a barrage of new
costs," said Aunger. "From municipal land transfer taxes to sky rocketing
property taxes, homeowners are being pushed to the brink to accommodate
increasing demands from government. A harmonized sales tax is yet another cash
grab on Ontario's already overtaxed homeowners."

The Ontario Real Estate Association represents 47,000 brokers and
salespeople who are members of the 42 real estate boards throughout the
province. Members of the association may use the "REALTOR(R)" trademark, which
identifies them as real estate professionals who subscribe to a high standard
of ethics and service.
OREA serves REALTORS(R) through a wide variety of professional
publications, educational programs, advocacy and other services. A division of
the association, the OREA Real Estate College, provides real estate
registration education courses in Ontario.

QUICK FACTS

-------------------------------------------------------------------------
Table 1: HST and Resale Homes
-------------------------------------------------------------------------
Current Tax HST Tax
Taxable Service Payable New Taxes Payable
-------------------------------------------------------------------------
Mortgage Insurance
Premiums(1) $752.40 $470.25(2) $1222.65
-------------------------------------------------------------------------
Legal Costs $50.00 $80.00 $130.00
-------------------------------------------------------------------------
Real Estate
Fee/Commission $720.00- $1,152.00- $1,872.00-
$1,080.00 $1,728.00 $2,808.00(3)
-------------------------------------------------------------------------
Home Inspection $20.00 $32.00 $52.00
-------------------------------------------------------------------------
Title Insurance $24.00 $15.00 $39.00
-------------------------------------------------------------------------
Total New Tax: $1,749.25-
$2,325.25
------------------------------------------------------------------------

- Ontario's real estate industry is essential to the provincial
economy. In 2008, real estate in Ontario accounted for $56.6 billion
in sales, $6.01 billion in ancillary economic spending and $1.35
billion(4) in land transfer tax revenue to the provincial government.
In addition, real estate employs 110,000 Ontarians directly and
indirectly.(5)

(1) CMHC premium of 2.75% for mortgage with a 5% down payment on a
$300,000+ home.
(2) Consumers currently pay the 8% PST on mortgage insurance premiums.
(3) Real estate commissions are negotiable or may be a flat fee.
Estimated range of 4% to 6% used.
(4) Ministry of Finance, Public Accounts, 2007/2008.
(5) Altus Group, "Economic Impact of MLS(R) Home Sales," June 12, 2007.

  • To learn more about Harmonized sales taxes and how they will impact each of us click here

Speak up:

Dalton McGuinty Premier - Government of Ontario

Email: dmcguinty.mpp.co@liberal.ola.org

Website: https://www.premier.gov.on.ca/feedback/feedback.asp

phone: (416) 325-3777 Phone: (416) 325-1941 Fax: (416) 325-3745

Posted by

 Mike Montague

  

Barrie Power of Sale Listings

Barrie home values

 

 
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Tags:
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Rainer
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Carl Stars
Sutton Group About Town Realty - Burlington, ON

The fact there are no comments on this blog shows how complacent we are as Canadians . it  is extremely sad

Sep 07, 2009 06:12 AM #1
Rainmaker
194,782
Mike Montague
sales representative : Keller Williams Experience Realty - Barrie, ON
"Who Moves You?"

It must be saying something. Unfortunatly our lifestyles and busy schedules leave little time for most to ponder let alone challenge the wrongs of our governing bodies. Our priorities are out of wack allowing the rug to be pulled out from under us.

Sep 08, 2009 10:33 AM #2
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Rainmaker
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Mike Montague

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