Monday, March 22, 2010

HST and its impact on Real Estate - Scotiabank Update

Hello all,

This morning I got an update from Heather Degraaf at Scotiabank regarding HST and it's impact on Real Estate Sales. This has clarified a few issues and questions for me, so hopefully it will be helpful for you:

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What is HST?

The merging of the current Provincial Sales Tax (PST) with the Federal Goods and Service Tax (GST) into one new tax.

Who does it Affect?

The New HST affects Ontario and British Columbia

Nova Scotia, New Brunswick, and Newfoundland have already implemented a Harmonized Tax while Saskatchewan, Manitoba, Quebec, and Prince Edward Island all collect separate PST or QST (Quebec)

How much is it?

In Ontario, it will be 13% (5% GST + 8% PST)

When will it be implemented?

Beginning July 1, 2010

How does it affect the sale of my current owner occupied principal residence (resale)?

The sale of housing that has been previously occupied by an individual as a place of residence and that was exempt from GST would also be exempt from HST

When does the HST apply to the sale of a new construction home or new rental property?

Builders sales of newly constructed or substantially renovated homes would be subject to HST when both ownership and possession of the home are transferred after June 30, 2010.

The provincial portion of HST would not apply to builders sales of newly constructed or substantially renovated homes that are taxable under the GST where, under a written agreement of purchase and sale, ownership or possession of the home is transferred before July 1, 2010.

The HST would not apply if either the ownership or possession of the complex is transferred, under a written agreement of purchase and sale, to the purchaser, before July 1, 2010 or if the sale was entered into on or before June 18, 2009 in Ontario and November 18, 2009 in British Columbia, regardless of the ownership or possession date.

Is there a Housing Rebate?

Yes, new housing rebates would apply when HST is charged and the purchaser would have qualified for a GST rebate

Please visit http://www.rev.gov.on.ca/en/taxchange/index.html and http://www.gov.bc.ca/hst for more information on the rebate.

Are other closing costs subject to HST?

Yes, other costs associated with the purchase of you rnew house, including legal fees, home inspection fees, appraisal fees, and real estate agent commission fees will be subject to HST.

This information was provided by Heather Degraaf, Mortgage Development Manager, and Heather can be reached at 519-421-5260

For more information, feel free to contact Heather, or myself!






Ben Sage, Sales Representative. http://www.bensage.com http://www.oxfordcountyhomes.ca Re/Max a-b Realty Ltd., Brokerage. 519-536-7535. 521 Dundas St., Woodstock, ON

Thursday, March 11, 2010

Ontario set to outpace the rest of the country in 2010!

Reprinted from CBC NEWS

Ontario's economy is expected to outpace the national average with 3.3 per cent growth this year and 4.1 per cent growth in 2011.

RBC Economics says increased housing activity and greater vehicle production spurred a return to positive growth in late 2009.

The bank forecast says Ontario's construction sector should see a rise in activity in 2010, fuelled by higher capital spending.

It also says high demand for real estate should extend to new homes, with housing starts likely to hit 64,200 units this year — 14,100 more than in 2009.

But, the report says, "this recovery will not be evenly felt across economic sectors. For instance, the province’s hard-hit manufacturers will continue to face many obstacles. Top on the list of impediments will be the continued strength in the Canadian dollar ... which will dampen the beneficial effect of improving demand south of the border."

RBC notes that a strong Canadian dollar limits U.S. demand for Ontario exports and the auto sector is susceptible to more turbulence.

The forecast also predicts the introduction of the new harmonized sales tax [HST] in Ontario on July 1, will be 'possibly the biggest policy event to occur in 2010 ..."

"Although the HST will result in certain currently exempt products and services being taxed, moving to a value-added tax structure will make the tax system more economically efficient and will improve the competitiveness of Ontario businesses by lowering the cost of doing business in the province. The benefits of such a tax system will accrue over the medium to longer term."

The report says the Ontario economy should improve this year and next as more industries move into recovery mode.

Ben Sage, Sales Representative. http://www.bensage.com http://www.oxfordcountyhomes.ca Re/Max a-b Realty Ltd., Brokerage. 519-536-7535. 521 Dundas St., Woodstock, ON