Myth: HST and Resale Homes

Since the implementation of HST back in July 2010 and numerous efforts by the Ontario government and OREA to explain how it applies to Real Estate transactions, 58% of Ontarians still believe that HST is applied to the purchase of a resale home, as per a survey conducted by Ipso-Reid . Furthermore, 60% of people living in the GTA find this to be true.

Well, if you're part of that 58% or 60% of people, it's time to finally dispel that myth. HST DOES NOT apply to resale homes in any part of Ontario. If you are buying a home, HST only applies to the following:

• Realtor commission, which is paid by the seller
• Lawyer fees
• Moving Companys
• And any other service associated with buying and moving into your home

So let's do an example to further clarify things, let's say you are thinking about buying a home listed for $400,000, the price you will pay for that home remains unchanged, it's still $400,000 and NOT $452,000 ($400,000 + HST), it's that simple!

The only time you will have to pay HST on a home, is if you buy it straight from the builder. The purchase price you see on the price lists handed out, usually does not include the HST that you will have to pay on closing. So if you're looking to avoid paying HST on a home, then buy a resale home instead.

Ontarians needs to grasp this concept, as too many of them believe the opposite, which is deterring potential buyers in purchasing homes at all. This may cause buyers to miss out on great opportunities and even not achieve the dream of home ownership.

Here is a video produced by the Ontario government and OREA, that further explains HST and real estate:


If you're still confused after reading this, then don't be afraid to give me a call as I'm always here to help!

Have a great weekend!

***image via Flickr***