GST Has Risen Again

This trooper has a new name...Harmonized Sales Tax.

The Ontario Budget released last week announced the plan for a harmonized sales tax like our friends in Atlantic Canada. For those of you buying homes after June 1st 2010 this new tax will not be charged on resale homes. There are some increases on tax charged on new homes, dependent on the value.

Where this tax increase will hit the everyday consumers is when purchasing a service related items. Service oriented businesses like lawyers, hair dressers, car repairs, accountants, real estate agents. That's right real estate commissions are subject to GST today and as of June 2010 taxes will increase to 13% on all commissions charged by a real estate agent.

Here is how deep this will effect you, the home seller.

Today: $300,000 x 5% commission = $15,000 + 5% GST = $15,750

June 2010: $300,000 x 5% commission = $15,000 + 13% HST = $16,950

Of course there is a way to avoid this HUGE increase of $1,200 in costs to you. As a matter of fact you can REDUCE it by thousands. Sell your home privately and you only have to pay HST on the fee of your marketing. Let's look at the same example, but as a private sale.

Today: $300,000 x 0% commission = $0 + $1,500* + 5% GST = $1,575 ($14,175 Savings)

June 2010: $300,000 x 0% commission = $0 + $1,500* + 13% HST = $1,695 ($15,255 Savings)
*PropertyGuys.com Elite Package

So as it turns out this new HST thing gives you even MORE savings selling privately. What a Trooper.


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