There are many hidden costs associated with buying Bloor West Village real estate. On top of the purchase price listed on the ad, you will also be responsible for mortgage fees, lawyer's bills, utility hookups, insurance, and property taxes. And then, of course, there's the sales tax. Many home buyers are up in arms over the transition from a provincial sales tax on real estate to a combined federal/provincial harmonized sales tax. But what does the HST changeover really mean for you? This article should help you figure it out.
First of all, if you're looking at resale Newmarket houses for sale, you can stop having panic attacks, because the HST doesn't even apply. Sales tax only applies to people who are buying brand new homes that have never been owned or lived in before. So if the home you're looking at is being sold by the owner or by a real estate agent on behalf of the owner, you're safe. It's only if you're buying a house directly from a builder or contractor that you'll have to pay HST.
If you're building your own Lindsay, Ontario real estate, you'll still have to pay HST on it, but not in the lump sum way that you would have to pay if you bought from a builder. Instead, you would be paying the HST on each piece of your home as you bought it from a building supply store, as you would be charged sales tax on each individual board and appliance and material as you went through the register. In a developer context, they would pay the tax on the materials and then charge you for it. In a resale context, nothing has been bought new so no tax need be paid.
For those of you who are buying new, you can also relax if your home is costing you less than $400,000, because you only pay HST on the portion of a home's price that is above this amount. What this means is that essentially only luxury houses for sale in Toronto will have any tax to be paid on them at all. And furthermore, if you're buying a new home, you get an automatic rebate of $24,000, which is often more than enough to cover any tax.
So how much is the HST? In Ontario it's 13%. Therefore if we set aside the rebate, the taxes paid on a home that cost $500,000 would be $13,000. This may seem like a lot to you, but you would have had to pay the old PST or provincial sales tax on it anyway, which would have amounted to $8,000. The effect of this is that Ontario is finally making real estate sales fair, since PEI real estate and the real estate of other provinces has been subject to HST for a long time.
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