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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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
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?