April 1st - 2011

Video on home buying and HST released by OREA and provincial government

A video that explains to prospective buyers the facts about the Harmonized Sales Tax (HST) and the housing market was recently released by the Ontario Real Estate Association (OREA) and the provincial government.

A video that explains to prospective buyers the facts about the Harmonized Sales Tax (HST) and the housing market was recently released by the Ontario Real Estate Association (OREA) and the provincial government.

This video is an effort to clarify for home buyers in the province the facts about the HST. In March, OREA and the Ontario government distributed a news release to announce the launch of the video.

Last fall, an Ipsos Reid survey commissioned by OREA revealed that 56 per cent of Ontarians mistakenly believed that the new HST applied to the full purchase price of a resale home. In fact, the HST is only levied on various transaction fees associated with the purchase of a previously occupied (resale) home.

“With this new video, OREA and the government are aiming to help consumers to better understand the real facts about the HST as it applies to home ownership,” says Barb Sukkau, new President of OREA. “We’re pleased to be part of the process in helping to educate consumers and to eliminate confusion around the HST as it relates to home buying.”

“Many real estate professionals have expressed concern that the misconception about the HST around resale homes has dampened the housing market,” Sukkau adds. “That’s because, as our survey revealed, that more than half of the consumers asked about HST were under the mistaken belief that the cost of a resale home is tens of thousands of dollars greater than it actually is.”

The new 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 homes, the additional tax only applies to the portion of the price above $400,000.

Featuring interviews with Ontario Revenue Minister Sophia Aggelonitis and Ontario Real Estate Association Immediate Past President Dorothy Mason, the video can be viewed on the provincial government’s website at www.ontario.ca/taxchange and at www.youtube.com/oreagr.

“Buying a home is one of the most important investments a person will make in their lifetime,” says Aggelonitis. “It is important that Ontario families know the facts when it comes to how the HST affects their purchases.”

“A resale home costs tens of thousands of dollars less than many Ontarians think because HST does not apply to residential resale transactions,” adds Mason.

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.

The provincial government and OREA remind consumers that:

  • 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 the Land Transfer Tax of up to $2,000 is available to first-time home buyers of resale homes.

“Both the video and news release are excellent examples of OREA working together with the provincial government to make sure that consumers are educated and knowledgeable about how the HST affects Ontario’s housing market,” adds Barb Sukkau, President of OREA.

You can watch the video and learn more about the HST and Ontario’s Tax Plan for Jobs and Growth at www.ontario.ca/taxchange and at www.youtube.com/oreagr.

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For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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