Many Consumers Confused by the HST!

  Prior to implementing the Harmonized Sale Tax (HST) on July 1st, the province of Ontario did a very poor job of communicating what this new tax was all about and where it did and did not apply. 
  As consumers we were all loathe to the idea of yet another tax increase and rightly so.  The HST has taken a bite out of all of us and has no doubt played a role in slowing our economy in recent months.  Where I noticed it particularly was at the gas pump. Prior to the arrival of the HST, $20.00 worth of gas included $.95 for GST.  Put in $20.00 now and the HST portion is $2.30! 
Prior to the HST's arrival, I had numerous conversations with seller clients one of whose home is worth over $2 million, all bemoaning the impact HST was going to have on their net sale proceeds.  The Ontario Real Estate Association recently commissioned a survey via Ipsos Reid the results of which revealed that 56% of Ontarians mistakenly believe that the new Harmonized Sales Tax (HST) applies to the full purchase price of a resale home.
 The fact is, the HST is only applicable on the various transaction costs associated with the purchase of a resale home that has been previously occupied. Lawyer's fees, real estate commissions, home inspection and appraisal fees are all HST taxable.  The purchase price of the home itself is not!  With that said, we do have some unique examples in our maket where the HST may apply on the purchase price and this bears close scrutiny.  Many condominiums at Blue Mountain and particularly in the Intrawest Village may present some tax implications.  Many of these properties are titled in company names and are also in rental programs from which income is derived.  These specific situations require due diligence on behalf of a buyer and their REALTOR® with the appropriate clauses and or conditions included in an Agreement of Purchase and Sale.
  If you are a Buyer or a Seller contemplating a real estate transaction in the near future and have some reservations about the HST and other tax implications or require some assiatnce regarding current market conditions, please feel free to contact me without obligation with your questions.