HST on New Skyscraper Condos Did you know… there is no HST on resale purchases of homes or condominiums but there is HST on real estate commissions, legal fees, surveys, appraisal assistance. Let’s thank our lucky stars that mortgages payments and interest on mortgages are HST exempt. If you purchase new construction; a new condo or new house, HST applies but there are applications for new housing rebates and generally the builders will handle the paperwork and submit them on your behalf but beware, cover yourself and make sure you ask questions. New condominiums as an investment? If you purchased a unit in a condominium; you must take occupancy when your floor is complete. Occupancy involves an occupancy fee payable to the builder every month at a rate as determined by the builder. It could be 3 months, it could be 6 months. The lower the floor the longer the period of time. The occupancy period allows the builder to obtain monthly fees for completed floors of the building. Chances are when you took occupancy of your 8th floor unit, the builder is still completing the floors above you. As the whole builder becomes completed under occupancy it takes approx.. 30 -60 for the condominium to pass all inspections and once cleared the condominium building can be registered as a Condo Corporation. During occupancy you don’t own the unit therefore you cannot rent or sell it without the permission of the builder is the common process. It all depends on your documents so please read your Purchase and Sale documents! Investors Beware - If you list your property on the Real Estate Market during occupancy you may be in violation of your Agreement. If you rent your property during this term, you are identified as an investor and a full HST will be charged to you on your registration and closing of your deal which is when your mortgages etc kick in. So be prepared to have the additional funds or you will not be able to close your deal. You do have the option of filing specific paperwork to the government to request a refund of the HST but that is only after you have paid it in full. Condominiums are definitely feeling an intense heat in maintenance fee expense. Maintenance Fees - Just consider how expensive your maintenance fee is under normal inflationary increases plus sub-metering energy efficiency costs and topping up your reserve funds; some buildings are hit hard. Sure interest rates are down, but who wants their maintenance fee to cost them more money than their mortgage per month. Many older condominiums are facing that now and new condominiums especially those only 1-2 years old have an even larger problem because the builder estimates the maintenance fees before the building cuts ground! A few years ago the HST hit hard and Condo owners were faced with an additional 7% increase on their maintenance fee on all related service. Originally there was only 5% GST related service contracts for Property Management, Security, Cleaning, Private Waste Disposal (exempt on City contracts), utilities (excluding water), Snow Removal, Landscaping, Window and Underground Washing and the list goes on…. 13% HST was hard to swallow. I have seen so many changes over the past 33 years I have been selling real estate. First-time buyer exemptions come and go; they increase; they decrease and they did disappear once but the public put out an APB and they came back. It’s a revolving door, a turn cycle of confusion. As the Founder and President of the Condo Owners Association (COA) (www.COAontario.com) which is a non-profit Association I started in March 2010 to represent and advocate for Condo Owners. Did you know there are over 1.3 million condo owners and over 567,000 condo units in the Province of Ontario and the numbers continue to grow because over ½ of construction is all Condominiums. In June 2012 with a strong push from COA, our McGuinty government decided to review the Condo Act to which is the provincial legislation for the operations of Condominiums. No different from the Traffic Act, Health & Safety Act etc. which must be enforced however there is no governance in the Condominium Act and it has not been updated in 14 years yet we have had massive construction everywhere. If you are an owner of a semi-detach or detach home; you may believe you don’t have to be concerned with the condominium market. That’s not true! If condominiums are not protected with good governance and accountability and better mandates for Board of Directors and Corporations there is a domino effect on the whole real estate market. Remember, most people who sell condos then buy homes. If their condo market value drops they cannot afford the home. I recently launched a Radio Show called the “Condo Xpert” on the HazeFm (www.thehazefm.ca). You can learn about a series of important information relating to condominiums, mortgages, insurance, the economy etc. I am thrilled to have prominent Guests to elaborate important issues of their profession. The show is podcasted so all shows will be posted to listen at any time. Real Estate is all about awareness. It is important to know the facts and work with someone you can trust !!
Realtor ® 416-561-7373 Linda@LindaPinizzotto.com
Sutton Group Quantum Realty. PAGE 7 YOUR WARD NEWS MARCH 2013
Published on Mar 1, 2013
Published on Mar 1, 2013
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