Taxes!
What does it all mean when I buy or sell property?
HARMONIZED SALES TAX (HST) Previously all services paid by Ontario consumers were taxed at the 5% GST rate only. The 8% Ontario provincial sales tax did not apply to services but all this changed on July 1, 2010.
The HST combines the 8% provincial sales tax and the 5% GST for a total 13% sales tax and applies to all services.
The HST does not apply on the purchase price of RESALE homes and condos but applies to all the services required in the purchase or sale of property. This includes real estate commissions, lawyers' fees, moving costs and home inspections.
Even though the HST does not apply to maintenance fees, the HST will result in a 6% to 7% rise in maintenance fees for condo owners.
Buyers of new homes & condos can apply for federal and provincial government rebates to offset portions of the HST.
LAND TRANSFER TAXES (LTT) The new HST should not be confused with the Ontario Land Transfer Tax. This is another tax that applies only when one buys real estate in Ontario and does not apply to the Seller.
One can calculate it by going to my Land Transfer Tax Calculator. To further confuse things if one buys in Toronto, a City of Toronto Land Transfer Tax also applies. Essentially this tax from the city almost doubles the amount of total land transfer tax a Buyer will pay.
Again, if you are considering buying in Toronto you can go to my Land Transfer Calculator to determine how much land transfer tax you will pay.
First time buyers can get a rebate of up to $2,000 which is equivalent to the first $227,500 of a property's value for the Ontario Land Transfer Tax and a rebate of up to $3,725 which is equivalent to the first $400,000 of a property's value for Toronto's land transfer tax.
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