I read a great article in the National Post last week on the impact of the New Harmonized Sales Tax (HST) will have on the housing market when introduced in July 2009. I have included the link to the article for your reference - National Post Article on the HST
In order to put the HST issue into perspective, I have outlined the key issues about the HST and how this impacts Homebuyers in Oakville, Burlington and Milton.
- New homes currently face the GST which is 5% and in most cases for new construction, it is included within the purchase price
- The Government originally proposed on July 1, 2010 that the new HST would be 13% on all real estate transactions which came under heavy criticism and the government has softened their stance
- The new HST guidelines for real estate is an exemption on the first $ 400,000 which means most Oakville, Burlington and Milton new construction homebuyers will be impacted with some added cost starting in 2010
The National Post did a very nice job of laying out what this means for the average consumer:
"On a $500,000 home in Toronto, the HST will mean $6,000 in new taxes. Here's how it works. The HST means an additional $40,000 in new taxes on that home, based on 8%. Builders get an estimated 2% tax credit on supplies, lowering the bill to $30,000. Minus a $24,000 tax break on the first $400,000 and you get to $6,000."
If you are thinking of buying a new home in the next year, my recommendation is to move in advance of this new tax as no one likes to pay out more money than you have to.
For more information on buying or selling your home, please do not hesitate to contact me at 905-693-9575 or brian@RightRealtor.ca
Brian Bell, MBA
Toll Free: 1-877-487-5833