HST and Real Estate
HST and Real Estate
Questions and Answers- HST
The HST will apply at a rate of 13% in
Does the HST apply to used resale homes?
NO. Sales of used residential housing and long-term rentals of residential housing will be exempt for HST purposes.
Does HST apply to REALTORS® services?
Yes. HST will generally apply to the same tax base as the current GST.
Does the HST apply to legal fees, appraisals, home inspection fees, and moving costs,?
Yes. HST will generally apply to the same tax base as the current GST.
Exempt - medical services, financial services, long-term residential rental accommodation, child-care services and educational services.
The average Selling Price in North Bay Year to Date is:
|
Average Sales YTD 2010 |
$224,118 |
QUICK FACTS:
The HST combines the PST and GST into one value added tax, meaning that the 8 per cent PST will be applied to list of goods and services that were previously exempt. The government plans to begin charging the HST to consumers on
OREA estimates that the new tax will add
Homeowners will also have to pay an additional 8 per cent on many services required to maintain their homes. These services were previously exempt from PST and include utilities, home renovation labour, landscaping, snow removal and many others. OREA estimates HST on these services will add
OREA represents 47,000 brokers and salespeople who are members of the 42 real estate boards throughout the province. OREA serves its members through a wide variety of professional publications, educational programs, advocacy and other services.
HST and Average Resale Home in
($302,354)
Current Tax HST Tax
Taxable Service Payable Payable New Taxes
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Legal Costs $50.00 $130.00 $80.00
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Sample Real Estate
Commission(1) $756.00 $1965.00 $1209.00
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Home Inspection $20.00 $52.00 $32.00
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Moving Costs $50.00 $130.00 $80.00
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Home Appraisal $15.00 $39.00 $24.00
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Home Energy Audit $15.00 $39.00 $24.00
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Total Est.
New Tax: $1449.00
(1) Based on 5% commission example; note that all commissions are
negotiable.
Source OREA
Mortage Guideline Changes
April 19th changes to mortage qualifications.
Here are a summary of the changes.
QUALIFYING FOR A FIVE-YEAR RATE
The adjustments to the mortgage framework will require mortgage insurers to ensure that new borrowers qualify for a five-year fixed rate mortgage when calculating the gross debt service and total debt service ratios. The measure is intended to protect Canadians by providing them with additional flexibility to support mortgage payments at higher interest rates in the future.
LIMIT THE MAXIMUM REFINANCING
Borrowers seeking financial flexibility can currently refinance their mortgage and increase the amount they are borrowing on the security of their home up to a limit of 95% of the value of the property. The adjustment will lower the maximum amount of the mortgage loan in a refinancing of a government-backed high-ratio mortgage loan to 90% of the value of the property, consistent with the principle that home ownership is a tool for savings.
DISCOURAGING SPECULATION
This measure will require a minimum down payment of 20% for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation. At present, borrowers may purchase a residential property with a 5% down payment. The change will require a 20% down payment for small non-owner-occupied residential rental properties. Borrowers purchasing owner-occupied residential properties which also include some rental units (such as a duplex) will still be able to access government-backed mortgage insurance with a 5% down payment.
source: nationalpost
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