Another Proposed Tax: GST-PST Harmonization

Ontario Premier McGuinty has publicly indicated that the provincial government may consider combining the federal Goods and Services Tax (GST) with the Provincial Sales Tax (PST) into one harmonized sales tax. The Ontario Real Estate Association (OREA) has indicated its opposition to this proposal and is continuing to monitor this issue.

OREA sent a letter to the Premier, OREA raising a number of concerns with potential harmonization of the GST with the PST. These concerns addressed that:

• a harmonized sales tax could increase the cost of newly constructed housing by adding the cost of PST on top of the GST, which already applies to the sale of new housing;
• the harmonized sales tax could result in PST being charged on various real estate related services that are currently exempt from PST, such as REALTOR® commissions, legal fees, appraisals, home inspections and other services; and the impact of a harmonized sales tax on consumer spending and the economy.

Given the recent rash of Mayor Miller taxation policies, Toronto homeowners are in no mood for any additional forms of taxation from any level of government.