On July 1, 2010 the Ontario and British Columbia provincial governments combined their GST and PST taxes that are charged on certain items and combined them into one harmonized sales tax (HST). All consumers must now pay HST on certain items that they didn't have to pay both GST and PST before, which means they're paying a lot more for some goods and services than they used to. It can be tough enough keeping up with all the bills that keep piling up within your home, but the HST has only made it harder. Be sure to ask your agent how the HST applies to your new home purchase.
A lot of people are still unsure of what goods and services charge HST and which are exempt from charging a retail sales tax. This article is going to help explain HST and real estate so that if you are in the market to buy a new condo for instance, you'll know exactly how the HST will affect you and your purchase.
In Ontario, before the HST came into effect, new homes purchased for $400,000 or less were subject to only a 5% GST tax and no PST tax. That still remains the same. The same scenario applies to new homes purchased over $400,000. There is, however, a new housing rebate in place that allows new home buyers to apply for a rebate that covers up to 75% of the HST for a maximum $24,000 rebate. Real estate commissions used to only charge a 5% GST tax but now charge the full 13% HST. This is all information to keep in the back of your head when shopping for houses for sale. Be sure to speak to Rental Rebate for information pertaining to HST rebates on any upcoming home renovations you have planned. Rental Rebate says you could qualify for huge savings!
In British Columbia, new homes were subject to the same 5% GST and no PST tax as in Ontario. Now, with the new HST in place, all new home purchases are subject to a 12% HST tax, which means B.C. residents have to pay 7% more in taxes for a new home than they used to.
Just like in Ontario, when purchasing a new home, the B.C. government has also put into place an HST rebate program for new home owners. This rebate is good for a partial 5% on all new home purchases under $400,000 and up to a maximum $20,000 rebate on any new home purchases over $400,000. Anything over the $400,000 rebate amount will be subject to the extra tax charged because of the HST. The HST in B.C. is also charged on associated real estate costs such as commission fees and closing costs.
Browsing Vancouvershomes.ca for listings of homes to purchase will give you an idea of how much HST will affect you.