(Source: Globe and Mail)

“We’re shocked because we’re still reeling from the land transfer tax”

CAROLYN IRELAND IN TORONTO – Lots of people have been stopping me in the hallways of the Globe to talk about the Ontario government budget and the impact that the new harmonized sales tax will have on buying and selling houses.

The budget confirms the plan by Dalton McGuinty’s government to harmonize the 8-per-cent provincial sales tax with the 5-per-cent federal goods and services tax.

The new blended sales tax will add a tax burden to many household goods that are currently not subject to provincial sales tax, including the purchase of new homes above $400,000 and the closing costs on the sale of existing houses.

Just yesterday my colleague Clare Jordan was thinking about putting her smallish house on the market and looking around for something bigger now that she’s found out how much ground two-year-old boys can cover.

Today she’s not so sure.

In any already struggling market, will her house be that much harder to sell with more taxes piled on? And will anything she buys become less affordable?

Because Jordan would be selling an existing house, the tax hit would apply only to the closing costs, including the realtor fees that she and the purchaser pay. Then there are the legal services, title insurance and home inspections that the purchaser typically forks out for. These costs are not currently subject to provincial sales taxes.

Read Calolyn Ireland’s full article “Another burden for homeowners” in the Globe and Mail March 26 2009.

Developments featured in this article

More Like This

Facebook Chatter