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HST Threatens The Affordability of Home Ownership

Posted by Sherry Rioux on October 15, 2009

I’m kind of surprised that in the course of day-to-day business, not too many people are talking yet about the impact of the new Harmonized Sales Tax (HST) on a real estate transaction.  As the July 1, 2010 implementation date draws closer, I’m sure it will become a major issue.

The new tax has its merits in respect to manufacturing in particular but quite frankly, I see it as a real tax grab when it comes to things like real estate.  The government will be generating revenue that did not previously exist.  We already pay land transfer upon the sale of property so really, it’s a form of double taxation and I’m seeing red over it myself.

In a news release issued by the President of our local real estate board, a number of points are made:

“As real estate professionals, REALTORS® know how important the dream of homeownership is to Ontario families. Unfortunately, thanks to the forthcoming HST, that dream is going to become much more expensive…  home buyers and sellers can expect to pay 8% more on legal fees, appraisals, real estate commissions, condo fees, home inspection fees, moving costs and the provincial government’s recently introduced system of mandatory home energy audits. According to the Ontario Real Estate Association (OREA) Ontarians will pay, on average, an additional $1,449 in new taxes on their next residential real estate transaction. “

The release continues, “… HST will add hundreds, potentially thousands of dollars in additional tax on utility bills, such as gas, electricity and home heating fuel, on home renovation labour, the cost of lawn upkeep or landscaping and the cost of snow removal. Moreover, a HST will increase the cost of living with 8% more tax on gasoline, personal and professional services, meals under $4, dry cleaning, cab fares, magazine subscriptions, plane tickets, vitamins and cell phone charges.”

When you consider that real estate and home ownership are major drivers in our economy, I’m shocked that the government has not softened the blow in this sector.  If you are concerned, write to your MPP and tell them that Ontarians do not need higher taxes on homeownership.

One thought on “HST Threatens The Affordability of Home Ownership

  • Jim
    on December 9, 2009

    Boo hoo hoo! My $400K home will cost me a few thousand more! Are you actually listening to yourself??

    This new tax system will be more efficient, more transparent, and will help Ontario businesses to be more competitive globally! Yes, individual consumers will have to suffer through some hikes in prices for a little while, but get over it! Think big picture, people.

    Honestly, it amazes me how narrow-minded the sheep-like masses can be when it comes to modifcations to our tax system. Anything but a strict reduction in rates is seen as negative. The majority of the developed world already uses a harmonized tax system because it makes sense.

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