HST on Real Estate Home Buying, Selling and Renting, HST Calculators
Here are a few of the basics on how the HST is calculated if you are a Home Buyer, Seller, Landlord or Tenant. The Ontario provincial government has provided rules/guidance on how it will transition to the implementation of the proposed Harmonized Sales Tax.
Here is how the HST will work:
The Ontario provincial government has passed legislation to combine the 8% PST (Provincial Sales Tax) with the 5% FST (federal Goods and Services Tax), creating a new 13% HST - Harmonized Sales Tax
The HST came into effect on July 1, 2010:
HST will NOT apply on the purchase price of resale homes.
HST will apply to services such as moving cost, legal fees, home inspection fees, appraisal fees, labour for renovations, landscaping and REALTOR® commissions if applicable.
It is estimated the average home buyer for re-sale homes will likely see a $1200 - $1500 additional cost in HST fees when moving.
HST will apply to the purchase price of newly constructed homes. However, the Province is proposing a rebate so that new homes across all price ranges would receive a 75 per cent rebate of the provincial portion of the single sales tax on the first $400,000.
For new homes under $400,000, this would mean, on average, no additional tax amount compared to the current system. For those considering buying for a new home for over $500,000 there will be a considerable impact with the hst.
Click here for some common questions and answers.
Click here for GST - HST Info Sheet on Selling Your Owner Occupied Home
Transitional Rules for New Housing
- Generally, sales of new homes under written agreements of purchase and sale entered into on or before June 18, 2009 would not be subject to the provincial portion of the single sales tax, even if both ownership and possession are transferred on or after July 1, 2010.
- The tax would also not apply to sales of new homes under written agreements of purchase and sale entered into after June 18, 2009 where ownership or possession is transferred before July 1, 2010.
Is there HST on residential rentals:
If you are currently renting a house, condo or townhouse on a long term bases (or month to month) you are currently not paying GST, therefore, HST will not apply. However, expect that the Landlord will have increased costs for the goods and services he uses, such as labour for repairs, landscaping etc. With increased costs to the owner, increases in rental rates in the future might be expected.
Information on 2010 Rent Increase guidelines and if a Landlord can increase your rent.
Is there HST on Condominium Maintenance Fees:
Currently there is no GST charged by Condominum Associations. But as the HST takes effect, many services associated with the common maintenance of the building will be subject to HST. It makes common sense to expect some adjustments in the future monthly fees.
Is there HST on Commercial Rents:
GST and Commercial GST applies to most of the rentals of commerial real estate properties with limited exceptions. Therefore expect HST to apply.
- With regard to the lease or license of goods, including non-residential real property, HST will generally apply to lease intervals or payment periods on or after July 1, 2010 and the general rules noted above will apply. However, where a lease interval begins before July 2010 and ends before July 31, 2010, it is not subject to HST.
With regard to the sale of non-residential property, HST is due where both possession and ownership of non-residential property occurs on or after July 1, 2010.
Additional detail on the transition rules is available at the provincial government web site here or by calling the provincial government enquiry line at 1-800-337-7222.
HST Calculator for Ontario Personal Tax Relief
HST Calculator on other possible house hold items.
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