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Do I have to pay HST when buying a home?

HST Tax

One of the most frequent questions I get from clients is about the upcoming Harmonized Sales Tax (HST) and how it will affect the purchase of a home.  Here is the breakdown of the rules:

When does the HST take effect?

July 1, 2010.

How much tax will I be paying in total?

13% (That’s 5% GST + 8% PST).

I’m buying a resale home, so will I have to pay this HST?

Good news!  The answer is NO!  If you’re buying a resale home, you simply pay the purchase price as usual.

I’m thinking of buying a new home from the builder, so will I have to pay this HST?

Ouch, yes you do!

But wait, I heard there is some sort of rebate program in place if I bought a brand new home?

The Province is proposing a rebate so that new homes across all price ranges would receive a 75 per cent rebate of the provincial portion of the single sales tax on the first $400,000. For new homes under $400,000, this would mean, on average, no additional tax amount compared to the current system.

Is there anything else that I would have to pay HST on?

Unfortunately, they’re hitting you everywhere.  You’ll be paying HST on legal fees, moving costs, home inspection fees, and real estate commissions.

Where can I find out the full details of this tax and how it works?

You can read all the exciting details right here.

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22 comments… add one

  • Doug February 3, 2010, 9:45 am

    What about if I’m builing a new home from plans and hiring my own builder?

  • Brent February 9, 2010, 9:31 pm

    If I purchase a new home before July 2010 but completion date is Summer of 2011, would I still have to pay the HST tax?

  • lang February 9, 2010, 9:38 pm

    Hi Brent

    Yes, in this case you would.

    Generally, sales of new homes under written agreements of purchase and sale entered into on or before June 18, 2009 would not be subject to the provincial portion of the single sales tax, even if both ownership and possession are transferred on or after July 1, 2010. The tax would also not apply to sales of new homes under written agreements of purchase and sale entered into after June 18, 2009 where ownership or possession is transferred before July 1, 2010.

    Hope that helps!

    Lang

  • Warner Ardelt March 18, 2010, 7:12 pm

    I don’t understand what they mean by the statement “For new homes under $400,000, this would mean, on average, no additional tax amount compared to the current system.”

    When you will have to pay %2 on the price of the home (25% of the PST portion), this would mean you would still be paying a maximum of %2 of $400,000 = $8000.

    “on average, no additional tax amount compared to the current system.” to me paying 2% is not ‘no additional tax amount’, so what gives?

    I still don’t think paying $7,980 is a break, if you buy a new home for $399,000 after July 1, 2010. I thought at 1st that there would not be any HST applied to new home less that $400,000 after July 1, 2010, but it seems I was wrong — gouged again!!

    Warner

  • Dharshi April 12, 2010, 11:57 am

    I am planning on buying a new home in april/may 2010. Possession is Jan 2011. Do I pay the HST even though I am buying prior to July 1st 2010?

  • Dharshi April 12, 2010, 11:57 am

    Please email me an answer. Thanks

  • Warner Ardelt April 12, 2010, 1:28 pm

    Well I could not assume that the builder will absorb the non refundable PST portion (since he won’t be taxes and pass the savings onto me), so the only thing to do for me was to amend my contract which luckily had an original closing late June, but I was to be pushed back 2 months as the mad rush of other buyers wanting to beat the deadline somehow pushed me to the “back of the line”. My amended contract now has a late Aug closing but puts all applicable taxes HST, GST onto the builder, and he also gets the HST rebate, and I don’t have to worry about the damn HST this time around.

    Warner

  • sabi May 21, 2010, 9:21 pm

    hello,

    my husband’s dad is the builder and so we are planning to move into the house he is building for us however the house will not be completed before july so does that mean i have to pay HST? Though the house is under our name already.

    Also can we claim gst rebate? The house will be under 450,000

  • sabi May 21, 2010, 9:22 pm

    please email me. thanks

  • nanette ouimette June 7, 2010, 10:23 pm

    Hi I am very concerned about the hst and now wondering if I have been had I purchsed a home for a price of 450,000 closing date is july 5 2010 the home is 30 yrs old please reply very nervous ….thank you 9 i have already paid in full )

  • Adam July 21, 2010, 7:55 pm

    Hello

    My closing date is on July 24, 2010. However, house agreements of purchase and sale were done back on Aug. 2009. The sale price of the new home is $330,000. Do I have to pay HST?

  • vladimir August 27, 2010, 2:41 pm

    Hi,

    My closing date is on Nov 5, 2010. Price of the house is $622,900 (GST included). On July 1, 2010 the only part of the house built was the foundation. How much should be the final price with HST included?
    Thanks

  • Michael November 10, 2010, 1:37 pm

    I just enter into an agreement to purchase a new home possesion date is April 2011, the cost of the house is under $400,000. Is the HST rebate still available?

    Michael

  • Britt April 11, 2011, 9:46 pm

    Hello,

    We are looking at buying a new home through a builder. We have been hearing mixed information. Our builder told us they already include HST in the total of the house, does this mean that we don’t have to pay on additional taxes or do we still need to pay GST (7%) on the total of the house?

    Perhaps a stupid question but important when financially planning.

  • Diana April 30, 2011, 12:58 am

    URGENT!
    I SOLD MY CONDO (ASSIGNMENT AGREEMENT) IN APR2011, THE OCCUPANCY DATE IS MAY, THE BUYER WILL PAY ME THE DEPOSIT AND MY PROFIT($40000.00) ON OCCUPANCY DATE
    SHOULD I PAY HST ON THE PROFIT($40000.00)?, OR CAN I ASK THE BUYER TO PAY IT FOR ME?

    MANY MANY TKS FOR YOUR HELPS!

  • Catz May 18, 2011, 1:38 pm

    I’m planning on buying a resale home in Brampton for about $500,000. Will I have to pay HST on this purchase?

  • Darlene Samuel June 7, 2011, 7:31 pm

    House with builder signed on Nov 2009.
    Not finished till Aug. 1st 2011.
    Paid $15,000.00 in Gst. Hst still owing?

  • Clayton August 3, 2011, 2:37 pm

    Hello,
    If a private person builds a house on the lot beside his existing house with the intention of moving in it to downsize then turns out he is not moving in and wants to sell the house he just finished building. Is the sale of the house he just built subject to 13% HST on Ontario?
    Thanks

  • Chris Dimitrovski October 5, 2011, 10:10 pm

    Hello, I purchased a new home December 2010, closing is November 2011 price is 315,000.00 in Milton. I would like to rent the home out. Is the hst included in the 315,000.00? Am I going to have to pay on top of the 315,000.00? I also herd I would have to pay additional hst because it is going to be a rental property?

  • paul March 30, 2012, 9:44 am

    hi there my question is that if i buy a new house from builder as a investment purpose do i have to pay hst on that if i have to sale this house in future. as a second property but not primary property howlong and within what period if i have to sale this property. is any time limit to save hst. thanks email me please.

  • Kathie July 6, 2012, 8:58 am

    Hi I like to buy a resale home, but it is a bank foreclosure. Under HST it is “additional to”. Do I have to paid HST even though it is resale? My former salesperson does not know the answer. Please help.

  • Raza January 5, 2013, 12:20 am

    Hi, I am a owner of a house since July 2011. Early 2012 I booked a new house value under $400,000, closing is in mid of 2013. I have following questions…..
    1) If I dont move in into new house but rent it out for atleast 1 year, do I have to pay HST?
    2) If I move in, but also want to keep current house, do I have to pay HST
    3) What is best way to avoid the HST (If I keep both houses).
    4) When I will be able to sell new house to avoid HST. I know, I have to pay tax on capital gain on investment property.

    Please send me email.

    Thanks alot in advance

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