Will I Pay HST When I Buy Real Estate?
What an absolutely TERRIFYING thought!
Imagine you find that perfect house and better still you can actually afford it! At $300,000, it’s exactly the right price. But wait a minute – now there’s the HST, which means an additional 13%! So now your dream home suddenly costs $339,000 instead of $300,000! Can it be true? No, thank God! Although the HST does affect real estate to a certain extent, re-sale homes are exempt from it.
Is All Real Estate Exempt From The HST?
New construction homes however, are not. But once again, the Government is willing to give home buyers a break here as well. If your desired piece of real estate happens to be a brand new construction – either house or condominium development – you’ll be eligible for a rebate of up to $24.000. In addition to this, if you decided to buy your new construction real estate around the time that the HST was implemented on July 1st, you may be exempt from paying the provincial part of the tax. It all depends on when the purchase and sale agreements were written up and when the transfer of ownership took place.
So What Else Do I Pay HST On When It Comes To Real Estate?
Now the question arises as to what parts of a real estate transaction are subject to the full weight of the HST, other than newly constructed homes. Basically, when buying real estate, you can expect to pay HST for:
- Moving services
- Legal fees
- Home inspection fees
- Appraisal fees
- Labor for renovations
- Landscaping
- REALTOR® commissions – if applicable
Unfortunately, in Ontario the Provincial Government has been less than effective in getting the message out to Ontarians about how the HST works when it comes to buying real estate. In fact, a recent poll commissioned by the Ontario Real Estate Association showed that 56% of residents of Ontario believe that they will have to pay the full amount of HST regardless of what type of real estate they buy!
The Ontario Ministry of Revenue has a number of publications, which you can view, on their site about the HST and real estate, so if you’re in the market, it may be worth your while to check it out!
Sundaybell - to help you get the answers that you need. Sundaybell will help you understand what services you might want - and need - when buying and selling real estate in the United States and Canada.
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