Be Aware of the new HST

Ontario implemented to harmonize its 8% provincial retail sales tax (RST) with the 5% federal goods and services tax (GST) to create a single, value-added HST at a 13% rate . Buyers of new homes in Ontario will be affected by the HST effective July 1, 2010.

New Housing Rebate

According to the Ontario Ministry of Revenue's publication titled "Additional Information for Homebuyers and the Housing Industry", the new housing rebate ensures that new homes with a purchase price up to $400,000.00 would not be subject to an additional tax amount compared to the RST currently embedded in the prices of new homes.

The plan is to rebate 75% of the provincial component of HST paid for new housing to be occupied by the purchaser, or a member of the purchaser's immediate family, as a primary place of residence, up to a maximum rebate amount of $24,000.00.

Grandfathering rules

Sales of new homes where the agreement of purchase and sale was entered into on or before June 18, 2009 will not be subject to the 8% provincial portion of the HST where both ownership and possession of the homes are transferred after June 2010.

Every purchaser should review their agreement of purchase and sale with a lawyer. You don't want to find out a few days prior to closing that you don't qualify for a housing rebate.




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