HST does not apply to resale homes
Revenue Minister Sophia Aggelonitis and Ontario Real Estate Association Immediate Past President, Dorothy Mason, today released a video explaining to prospective buyers the facts about the HST and the housing market.
The video highlights the fact that there is no HST on the purchase price of resale homes. Sales tax did not apply to the purchase price of resale homes under the previous PST, and it does not apply under the HST.
For new housing, additional tax only applies to the portion of the price above $400,000.
The Ontario Enhanced New Housing Rebate means that buyers of new homes receive a rebate of up to $24,000 regardless of the price of the new home. Buyers of new homes priced up to $400,000 (about three-quarters of new homes built in Ontario) on average pay no more – and possibly even less – tax than under the previous PST, where sales tax was hidden in the price.
QUOTES
“Buying a home is one of the most important investments a person will make in their lifetime. That's why I'm pleased to be working with OREA to provide information about purchasing a home in Ontario."
— Minister of Revenue Sophia Aggelonitis
“A resale home costs tens of thousands of dollars less than many Ontarians think because HST does not apply to residential resale transactions.”
— Dorothy Mason, Immediate Past President, Ontario Real Estate Association
QUICK FACTS
• The HST does not apply to the purchase price of resale homes.
• Sales tax did not apply to the purchase price of resale homes under the previous PST.
• In addition to not having HST on resale homes, a refund of Land Transfer Tax of up to $2,000 is available to first-time home buyers of resale homes.
Learn More: www.youtube.com
What's Taxable Under the HST and What's Not?
Most items have no new tax
Most of the goods and services we buy every day have no new tax. That's because there are many items on which we already paid the previous Ontario provincial sales tax (PST) and the federal goods and services tax (GST) before the new harmonized sales tax (HST) came into effect on July 1, 2010. For many things, such as cable and phone services, new cars and adult clothing, there hasn't been a change. However, since July 1, 2010, instead of paying 13 per cent sales tax to two governments (eight per cent to Ontario and five per cent to the federal government), there is one sales tax – still 13 per cent – collected by the federal government.
No PST before July 1, 2010, no HST now
There are some other items that have never been subject to sales tax, such as basic groceries, municipal transit and prescription drugs. No HST is charged on these items.
Point-of-sale rebate
Other products are eligible for a point-of-sale rebate for the Ontario part (eight per cent) of the HST. This means you will only pay the five per cent federal portion of the HST. These include print newspapers, books (including audio books), diapers, children's clothing and footwear, children's car seats and booster seats, feminine hygiene products, and qualifying prepared food and beverages sold for $4.00 or less.
No new tax for 83 per cent of products and services
In total, about 83 per cent of products and services purchased by consumers have no new tax. Only 17 per cent are new to the HST – items such as personal and professional services (e.g., hairstyling and legal fees) as well as energy costs including home heating fuel and electricity.
For media inquiries only:
Melissa Zanette, Minister’s Office, 416-314-4801
For OREA comment or to schedule an interview with President Barb Sukkau:
Jim Flood, Director Government Relations, 416-442-3408
All other inquiries:
Toll free 1 800 337-7222
Toll free 1 800 263-7776 TTY (Teletypewriter)
