The controversial harmonized sales tax (HST) was passed through legislature recently. When the HST kicks in on July 1, 2010, it will add 8% sales tax in Ontario and 7% sales tax in British Columbia to many items that were previously only taxed GST at 5%. Not unsurprisingly, the HST isn’t very popular.
In addition to the increased cost in taxes on real estate purchases, all transactions relating to the purchase and sale of homes will now be subjected to the HST, including: real estate commissions, lawyer’s fees, closing costs and home inspections.
Both agents and mortgage brokers are concerned that the increased transaction costs will result in homebuyers looking to spend less money on a house than they might have otherwise.
In the long run, with the current state of the housing market, only time will tell the amount of impact that the HST will have on sales.
