The Ontario Real Estate Association (OREA) says the provincial government’s plan to harmonize the GST and PST will add over $2,000 to the cost of a real estate transaction, hurting the resale home market and prolonging the housing industry’s recovery from the current economic downturn.
“Now is not the time to be erecting barriers to homeownership,” says Pauline Aunger, president of OREA. “We need consumers to invest in housing to help get our economy going again.”
Under a harmonized sales tax (HST), homebuyers and sellers will have to pay extra tax on a range of services associated with real estate transactions such as legal fees, moving costs, real estate commissions and home inspection fees. Currently, consumers only pay the five per cent Goods and Services Tax (GST) on these services.
“These additional taxes could price some homebuyers, especially first-time homebuyers, right out of the market,” says Aunger. “Harmonizing will not help homebuyers in any way.”
For a resale house priced at $360,000, a HST could add over $2,000 in new taxes to closing costs. In total, a HST will add $313 million annually in new taxes to resale home transactions.
“In the last decade, Ontario’s homeowners have faced a barrage of new costs,” says Aunger. “From municipal land transfer taxes to sky rocketing property taxes, homeowners are being pushed to the brink to accommodate increasing demands from government. A harmonized sales tax is yet another cash grab on Ontario’s already overtaxed homeowners.”
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Andrew Gold
The harmonize tax in my view is going to hurt the economy further. Yes, i understand the economics behind it but it is going to force consumers to save more, instead of buying more. Buying is the only way for the economy to come out of a slump.