Harmonized Sales Tax will become effective on July 1, 2010.( the combining of GST and PST into a single harmonized tax)
This will unfortunately have a negative effect for both home buyers and sellers after the proposed implementation date, as per the following:
- Services-moving costs, legal fees, home inspection fees, mortgage insurance premiums, title insurance and Realtor commissions will all have significant taxes added- The Ontario Real Estate Association (OREA) estimates that all the above will add approximately $2000 in home closing costs per transaction.
- New Homes- all new homes over $500,000 will be subject to the full 13% tax ($65,000 compared to the current $25,000 on a $500,000 home) Homes under this price are entitled to some rebates
The best way to beat the above negative impacts of this new 13% combined tax is to ensure your next real estate transaction occurs before the July 1, 2010 implementation date. If you were planning to make a move in the next year or two make sure you move on it a bit earlier and avoid the extra costs!
Cameron Weir is a Sales Representative with Royal LePage R.E.S. Ltd./Johnston & Daniel Division. Cameron is a regular contributor to the Muddy York Blog. Cameron’s website is located at www.cameronWeir.ca.
