Ontario's New HST Will Cost Greater Toronto Area Homebuyer's and Sellers Millions.
Ontario consumers are on the brink of another provincial tax grab, the HST, and it seems that no matter how much lobbiers, business people and the public protest, it will go through anyways.
Effective July 1st, 2010, consumers can expect to pay an additional 8 % tax on all services which previously were only charged the 5% GST.
This measure of Premier Dalton McGuinty's has the potential to do away with 21,200 construction jobs in Ontario and many of the jobs that support the construction industry.
A recent report commissioned by the Building Industry and Land Development Association (BILD) states that of the additonal $800 million the new HST tax will cost Ontario buyers of new homes, Toronto area homebuyers will pay approximately $575 million of it due to the higher overall new home prices in the Toronto area.
New homes which cost less than $400,000 will be exempt from the new HST and those homes costing less than $500,000 will have partial rebates.
In the Toronto area, which covers many nearby cities such as Mississauga and Oakville, 36% of new homes cost over $400,000.
After July 1st, a home buyer will be paying an additional $40,000 on a $500,000 new home.
For this reason many buyers are rushing to purchase before the July 1st deadline.
In addition to the negative effect the HST will have on homebuyers, home sellers will be paying thousands more when they sell their homes since all of the services that are involved when a home is sold such as real estate commission, legal costs, etc will have an additional 8% tax over and above the previous 5% comprised of the GST only.
Consumers will be paying the additional 8% tax on gas, utilities, and many more items which previously were only taxed the 5% GST.
Just when the economy is beginning to make a comeback after a rough couple of years, the Ontario government hits us with the HST.
I suppose it's not enough that Ontarions are already one of the highest taxed peoples on the planet; Dalton McGuinty feels the need to squeeze just a little bit more from an overtaxed and hurting populace.
©2009JoSmith
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Jo-Anne Smith, the author of this article, is a REALTOR® with Brekland Realty Group, Oakville, Ontario and welcomes your real estate inquiries. To contact her, visit www.oakville-burlingtonhomes.com |
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Jo-Anne Smith, the author of this article, is a REALTOR® with Your Choice Realty , Mississauga, Ontario and welcomes your real estate inquiries. To contact her, visit www.oakville-burlingtonhomes.com |
I haven't seen a governmental entity that has responded to the recession with lower taxes and fees anywhere, above or below the US/Canada border.
Not a one.
I just don't see any benefit to 'harmonizing' the taxes. It's supposed to help businesses but I don't see how. Everyone I've talked to feels this is not the time to implement a new tax. Won't it just make buyers pull back again? Job markets are still recovering. What about the people who still don't have a job? It's a very ill timed tax grab to me.
Wow...sounds like us...continuously finding ways to get more money....instead of just managing what they do have.
Len,
Lowering taxes during tough economic times is one thing, but raising them? Our provincial government seems to believe in 'hitting them while they're down'...
Jo
Janice,
It will cost Ontario thousands of jobs and make things that much tougher for homebuyers and sellers...McGuinty doesn't seem to care what the people have to say..
Jo
Gary,
True, True and TRUE!
Jo
Sally,
You've put it perfectly....
Jo
Jo-Anne - The transition to HST on July 1, 2010 will also affect British Columbia. However, in BC, the HST rate will be 12% rather than 13% because the BC provincial sales tax rate is 7% compared to the 8% PST rate in Ontario.
Jo-Anne this is a big concern for us here in New York. As a result when buying a house that is a major question. Our school tax has gotten really high, some seniors although owning their homes outright can't afford their homes because of the taxes.
Jo, There too? They have just added a very large "energy tax" here and Jennifer is right, our school taxes are unbelievable!
Jo~
And so we move toward more and more and more and more...or is it less and less? i guess it has to do with the perspective.
Jo,
I really don't understand why they can't simply exempt some items. The HST could still be 5% on some items and 13% on others. This really is just a tax grab.
Brian
Marc,
I had heard of the HST coming into affect in BC too....I guess it's the way of the future for all provinces and territories, at least the few that don't yet have HST.
Jo
Jennifer,
It's very sad that education taxes have gotten so high in New York...what is driving education costs up?
Jo
Carole,
What does the energy tax consist of? Does it affect all consumer goods?
Jo
janeAnne,
Less and less money in the pockets of citizens and more and more in the pockets of politicians and government bodies. Very sad.....
Jo
Brian,
I agree.....I know some items are exempt, but the ones that really matter like those that involve a home purchase or sale, are not. This is very unfortunate and will place a hardship on the Ontario economy in all sectors.
Jo
Jo - as a concerned taxpayer who has helped to challenge the government on taxation issues, from the municipal all the way to the federal level, I know it is an uphill battle all the way.
Sometimes one voice can make a difference
But what would make the biggest difference is simply stop asking/demanding/allowing governments at all levels to do "more" for us. Every time this group or that group gets something we all pay.
Barrie,
You certainly have the right idea...and yes, I do believe that the smallest of voices can make a huge difference.
Jo