Perhaps the only people that should be concerned are some bureaucrats that collect taxes – it seems like we can now eliminate one of the old GST or PST collection offices. There is certainly going to be some efficiency realized through the harmonization, but there will undoubtedly also be some cash-flow negative results for Ontarians too.
HST now applies to areas that were previously PST exempt, which will now, among other things, increase the amount it costs to buy a home. Some fees which were previously PST exempt for home buyers include:
- Legal Fees
- Mortgage Insurance Premiums
- Home Inspection Fees
- Real Estate Fees
- Moving Fees
- Title Insurance
It remains to be seen if the effects of the HST will make a significant impact on home sales, but my feeling is that it will. The effect of the HST, coupled with changes proposed in CDN mortgages (see my blog from a couple weeks back), will almost certainly slow the real estate market down – in particular for first time home buyers.
It has been said that there are only two things certain in life: Death and Taxes. Well, this tax will not be the death of us, but it will slow us down a bit. My advice to you, if you are planning to buy a home this year: Buy soon and complete the purchase before July 1st. By buying this spring you will not only save on the increased HST fees, but you will lower your risk of getting a higher interest rate on your mortgage (rates seem to have nowhere to go buy up).
If you are thinking about buying or selling your home, call Derek Dunphy, Sales Representative at Johnson Associates Real Estate Ltd., Brokerage. Phone (905)877-5165, email Derek@CallDerek.ca, or contact through the website: http://callderek.ca/.
Hello there!
ReplyDeleteI am thinking about buying a townhome from a developer in Georgetown so I can commute to my workplace in Brampton. Right now I am thinking of buying from Weavers Mill in Georgetown, but I am still exploring options because I am a first time homebuyer.
Is $289,990 reasonable for a townhome for in Georgetown? Also, does that usually include the price of HST, or is ignoring the HST? I've been told by friends/coworkers that 99.99% of the time they include the HST in the price, but I really don't know if they were telling me the truth.
HST is indeed applicable to all new home sales in Ontario; however there is a rebate available for all new home buyers from the province of up to $24000. With this rebate, those buying homes up to approximately $400000 will not pay any additional tax than they did through the old system (all new homes were subject to GST pre-July 2010).
ReplyDeleteIt is important to note that resale homes are not subject to HST at all. HST only applies to related services but not the house itself. For example, one may pay HST to their lawyer, home inspector and REALTOR, but not on the home.
In answer to your question about the pricing in the new Weaver's Mill subdivision: On the surface, $289K may indeed be a good price for a townhouse in Georgetown - Georgetown has been and I think will continue to be a great place to invest in real estate. It is difficult to tell if it is indeed a fair price; I have not seen the plans, the list of inclusions...
It is common when buying a new home to pay additional fees for premium lots, upgrades, landscaping, and pre-delivery inspections; all on top of the 6% federal tax (net after your rebate on HST). Also remember that after buying a new home, one often invests money in fences, garage door openers, air conditioning units, water softeners... All of which are often included in the price of a resale home.
If you need any help or advice about real estate, please do not hesitate to call/page me at my office (905)877-5165.
Happy House Hunting!
Derek Dunphy, REALTOR, Salesperson
Johnson Associates Real Estate Ltd., Brokerage