legallyspeaking
New-home
purchases and HST by jayson schwarz & Konstantine Chatzidimos
Purchasers of new, resale and condominium
homes who visit our offices are often confused about the way the harmonized sales tax (HST) affects their transactions. This inspired us to write a few words in the hopes of demystifying this oft-misunderstood aspect of the new home purchase. Purchases of new freehold and condominium homes in Ontario – unlike resale or “used” What is important to homes – are subject to the HST. HST understand is that the is a combination of the eight per cent provincial sales tax (PST) vast majority of Ontario Ontario and the five per cent federal goods builders incorporate the and services tax (GST). The percentrebated amount of HST in age of HST applicable to the transactheir purchase price. tion is directly related to the purchase
price of the home. However, homebuyers are able to claim a rebate of some of the PST and GST. For example, the rebate associated with the PST portion of the tax is available for new homes priced up to $500,000. The PST rebate for new properties under $400,000 is six per cent of the purchase price (or 75 per cent of the eight per cent PST portion of the HST), with the rebate amount reduced for homes priced between $400,000 and $500,000. There is a similar rebate mechanism for the five per cent GST portion of the HST. continued on page 44. . .
42 New home guide GTA | feb 16 - mar 2, 2013
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