DURHAM REGION, JUNE 11, 2010 – Starting July 1, 2010 Ontarians can expect to pay a harmonized sales tax (HST) rate of 13% on a long list of goods and services that were previously exempt from the 8% Provincial Sales Tax (PST).
“While the impact of the tax will be felt by all Ontarians, the province’s 3 million homeowners and the thousands who buy and sell a home every year will be hit particularly hard by this latest tax.” commented Dierdre Mullen, President of the Durham Region Association of REALTORS®.
“As real estate professionals, REALTORS® know how important the dream of homeownership is to Ontario families. Unfortunately, because of the forthcoming HST that dream is going to become more expensive. After July 1, 2010, every residential real estate transaction in Ontario will face a significant tax increase. Specifically, home buyers and sellers can expect to pay 8% more on legal fees, appraisals, real estate commissions, condo fees, home inspection fees, moving costs and the provincial government’s recently introduced, but not yet implemented, system of mandatory home energy audits. According to the Ontario Real Estate Association (OREA) Ontarians will pay, on average, an additional $1,449 in new taxes on their next residential real estate transaction.”
As well, the HST will add 8% more tax on a series of home related costs. Specifically, the HST will add additional tax on utility bills, such as gas, electricity and home heating fuel, on home renovation labour, the cost of lawn upkeep or landscaping and the cost of snow removal. Moreover, the HST will increase the cost of living with 8% more tax on gasoline, personal and professional services, meals under $4, dry cleaning, cab fares, magazine subscriptions, plane tickets, vitamins and cell phone charges.
“When added together” Ms. Mullen explains, “the impact of the HST on Ontario family’s disposable income will be considerable. In short, the HST will reduce the people of Ontario’s quality of life by taking more of their hard earned money to fund government initiatives.”
While the Government of Ontario plans to compensate homeowners by offering sales tax transition cheques and modest income tax reductions, these measures will in no way offset this new tax. A onetime payment of $1000 (for a family of four) and a modest $368 reduction in income taxes will do very little to offset the burden of an 8% tax increase on a litany of items in perpetuity.
“With a May Average Selling Price of $301,000, almost $150,000 less than the GTA average, the Durham Region offers a more affordable resale home solution for those concerned about affordability once the HST comes into effect.“
