Across Canada, a number of provinces have combined their Provincial Sales Tax (PST) with the Goods and Services Tax (GST), creating a new HST, or Harmonized Sales Tax. Confusion over HST has been widely cited by real estate professionals as the main factor contributing to a slowdown in housing sales. These misunderstandings are helping neither the housing market, nor the economy. More importantly, they’re not helping you get closer to the home of your dreams. Talk to your REALTOR® if you are confused about HST and its effect on the real estate market.
A misguided belief that HST applies to resale homes means that many buyers think the cost of a resale home is tens of thousands of dollars more expensive than it actually is. Contrary to public opinion, HST does not apply to resale homes. It does, however, apply to many of the services associated with purchasing a home. These services include: home inspections, appraisals, renovations and repairs, legal assistance, moving labour, and REALTOR® services. It has been estimated that the average home buyer will pay an additional $1200-$1500 in HST fees on the purchase of their new home.
HST also applies to newly constructed homes. Provincial governments, however, are proposing a rebate of 75 percent of the provincial portion of the sales tax on the first $400,000. This means a savings of up to $24,000 on HST. Don’t let HST stand between you and your dream home. Talk to your REALTOR® if you have any questions or concerns.