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New HST Rules for New Home Buyers and Housing Industry

January 7th, 2010 No comments

The provincial government has released new rules governing how the Harmonized Sales Tax (HST) will be applied to new home buyers and the housing industry in general.
This is the second HST notice posted by the government relating to this industry.
The government’s notice provides information to help homebuyers and the housing industry prepare for the proposed Harmonized Sales Tax which, subject to legislative approval, would come into effect on July 1, 2010.
The announcement relates to rebates for new homes and new rental homes; homes with leased land; owner-built homes; new mobile homes and new floating homes; and other related issues.
The Ministry of Revenue has a comprehensive list of transition rules and explanations relating to the HST on its
website.

 

Buying a Home?
The HST will not apply to resale homes.

 

Enhanced New Housing Rebate
Buyers of new homes will receive a rebate of up to $24,000 regardless of the price of the new home.
This rebate ensures that buyers of homes priced up to $400,000 (about three-quarters of new homes built in Ontario) will, on average, pay no more – or possibly even less – tax than under the PST system.

 

New Rental Housing Rebate
New rental housing, including residential investment properties, will receive a similar rebate. This rebate will also support affordable rental housing in Ontario.

 

Transitional Rules
For some purchases of new homes that straddle the implementation date of July 1, 2010, the provincial portion of the HST will not apply, depending on when the written agreements of purchase and sale were entered into and when ownership or possession are transferred.

For any questions about how the new HST will affect you call Verico Designer Mortgages at 1.866.824.8057

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