HST Does NOT Apply To The Price of a Resale Home!

Real Estate TaxesAn Ontario Real Estate Association (OREA) survey reveals that confusion about the Harmonized Sales Tax (HST) and buying a resale home has not decreased in the last year despite efforts by the provincial government and real estate industry to educate the public.

The survey conducted by Ipsos Reid shows that 58 per cent of Ontarians mistakenly believe the HST is applied to the purchase price of a resale home versus 56 per cent who believed the same in an identical OREA/Ipsos survey conducted last fall.

Since the introduction of the HST, the Ontario government has created a website to inform consumers about the changes to tax system and has worked with OREA on a video with the former Minister of Revenue, prior to the ministry becoming part of the Ministry of Finance, to explain the facts about home buying and HST. On its own, OREA has produced its own video about HST confusion and has worked with its members to inform the public about this topic. Click here to view the full article.

 

It’s amazing how many people still believe that they would have to pay 13% HST on the purchase price of a resale home. Before HST there was GST, and everyone understood that GST applied to services (such as commission fees, legal fees and home inspections) as well as to the price of NEW homes, but not to the price of resales. HST is just GST with the old 8% Provincial Sales Tax tacked on, raising the tax from 5% to 13%, and basically applies in the same way as GST to real estate transactions. Where on earth did the idea come from that it would suddenly apply to the price of resales as well? If it did, it would be the grand-daddy of all tax grabs!

  • Keith McDonald

    requesting clarification re HST on private resale home – in the event that the seller/long-time resident has been using a couple bedrooms for paying guests, does this in any way trigger an HST component to a portion of the home sale?