Monday, May 4, 2009

Save Your Money - Avoid the HST

Many homebuyers in the market today are asking the same question - How will the new harmonized sales tax implemented by Dalton McGuinty affect my new home purchase? The feeling is quite similar as to when the government implemented the new land transfer tax last year. Everyone was rushing to purchase as quickly as they could to avoid the new tax.

A similar situation has been created, however introducing this new provincial plan at a time when the economy is suffering does not make things easier for home buyers. For example to purchase a $500,000 home after July 1st 2010 could end up costing you an additional $40,000.

When construction costs increase, so will the price of new homes and condos in the City of Toronto. As of now there are only two options in order to avoid this tax in the City of Toronto if you are purchasing pre -construction real estate. They are as follows:

1. Purchase a pre-construction condo under $400,000 as units at this price range are exempted from the tax.

2. Purchase a pre-construction condo before July 1, 2010 in order to avoid the tax.

Toronto home buyers have still not recovered from last years imposition of the new City of Toronto land transfer tax. In a market where the volume of new home sales has dropped, the last thing Ontario needs is a new 8 per cent tax on legal fees, agent commissions and other costs related to the purchase and sale of new condo.

Erica Smith
Sales Representative - AURA Condos