HST...What Does It Mean For
Toronto Condo Buyers And Condo Owners?
On July 1, 2010 the new Harmonized Sales Tax took effect in Ontario. Previously all services paid by Ontario consumers were taxed at the 5% GST rate only. The 8% Ontario provincial sales tax applied to goods and not services but all this changed on July 1st. The new HST combines the 8% provincial sales tax and the 5% GST for a total 13% sales tax and applies not only to all goods but all services as well.
What does this mean for current condominium owners in Toronto? While condo maintenance fees themselves are not subject to GST, PST or HST, many of the services that make up condo fees such as hydro, natural gas, repairs, and landscaping will now be taxed at 13%. Therefore the maintenance fees will have to increase to cover this additional tax on the cost of services to the condominium. Industry experts suggest that the HST will result in condo fees rising an average of 6 to 7% depending on the building.
What does it mean for those who are considering buying Toronto condos? The HST does not apply to the purchase of RESALE condominiums but applies to the purchase of NEW condominium units. If buyers of new condominiums take possession of their unit after July 1, 2010 the 13% HST will apply but there are certain rebates buyers are also eligible for:
1. Federal HST Rebate applies only to new condominiums valued at $450,000 or less and reduces the federal portion of the HST from 5% to 3.5%.
2. Ontario New Housing Rebate applies to new condominiums purchased as primary residences and is a 75% rebate on the provincial portion of the HST of up to $24,000 or the first $400,000 of the purchase price.
Read MORE about buying a condo in Toronto and TAXES that may apply
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