HST (Tax) on BUYERS of Real Estate
In my last blog I let you know how the HST affected Sellers in the GTA. Now what happens to Buyers?
Well if you are buying a new home or condo, most builders as they did with the GST, will incorporate the HST in the selling price and claim the rebates from the government. The government is giving 75% rebate ($24,000) on the first $400,000. So you probably won’t notice the spike in prices on the average home and condominium.
However, for the high end homes you will definitely feel the tax. At $500,000 expect to pay another $8000 and buying a $600,000 new home- $16,000.
What happens if you are buying a home for $600,000 and it isn’t new? How much tax will you pay? Lucky for you, just like the current GST exemption, the government is extending the exemption to HST on buying resale homes. However, if your home has been extensively renovated and improved, then the government will want its appropriate share of improvement taxes.
Lastly as a Buyer you will be paying closing costs on the purchase of a home. If you close before July 1st, 2010, you will not be paying HST on your legal, moving, inspection fees. However, if any or all of these services are done after July 1st, 2010, you pay HST.
Over all most Buyers will pay less HST on Resale homes and condos but pay more on buying NEW. Buyers save on resale as they do not usually pay Realtor commissions.
So folks, these are the changes Buyers should be aware of. If you close before July 1st… HST will not be charged. HST will be charged if you buy now and close after July 1st.
Have questions? contact Vijay Gandhi, Re/max Dynasty – Real Estate Consultant – 647-267-6338 firstname.lastname@example.org
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