(feel free to call me or e-mail me to obtain my HST brochure)
BUYERS
The future HST will ONLY apply to transactions taking place for the purchase of a NEW home or a SUBSTANTIALLY RENOVATED one.
THE HST DOES NOT APPLY TO “OLD” HOMES.
DEFINITIONS
(as per the Canada Revenue Agency website)
Home or House
The word home or house includes:
- a single family home,
- a residential condominium unit
- a duplex,
- a mobile home, or a floating home
- shares in a cooperative
New Homes (owner-built or built by a builder)
Rather straight forward...
Substantially Renovated
Major renovations have to be made to meet the definition of a substantial renovation. Therefore if 90% renovations have been done to the house you want to purchase, you will have to pay HST on it. Use the following “90% test” to determine the level of renovations:
- In a major renovation project, the interior of a building is essentially gutted;
- If 90% or more of the interior of an existing house has been renovated it qualifies as a substantial renovation (the “90% test”) = you will then pay HST on the purchase price.
- Not included in the 90% test: you do not have to remove or replace the foundation, exterior and interior supporting walls, roof, floors, and staircases.
- Only liveable areas count toward a substantial renovation: main floor living areas and finished basements and attics.
- Non liveable areas: garages or crawl spaces;
SELLERS
As a Seller, the HST will be applicable on the following fees (non-exhaustive list):
Realtor’s commission
Notary’s fee
Oil tank removal fees
Landscaping
Moving costs, etc..
WHAT ABOUT PRE-SALE?
Agreements signed on or before Nov. 18, 2009 AND taking possession before July 1, 2010:
Exempt from the provincial portion of the HST (7%);
Will have to pay the GST (5%).
Agreements signed on or before Nov. 18, 2009 BUT taking possession after July 1, 2010:
HST to be paid in full (12%)
May be eligible for the New Housing Rebate
Agreements signed after Nov. 18, 2009 and taking possession before July 1, 2010:
Exempt from the provincial portion of the HST (7%)
Will have to pay the GST (5%)
Agreements signed after Nov. 18, 2009 and taking possession after July 1, 2010:
HST to be paid in full (12%)
May be eligible for the New Housing Rebate
Apart from the purchase price of your new or “old” home you will still have to pay the 12% HST on a range of goods and services, including but not restricted to:
Future home renovations, eventual new energy efficient
appliances, insulation, windows and doors, heating and
electricity bills, telephone, cable, closing costs such as notary fees, appraisals, home inspections, moving costs, etc.
NEW HOUSING REBATE
New housing rebates would be available for the provincial component of the HST (7%) paid for all types of housing eligible for GST new housing rebates. Qualifying housing would generally include the following types of newly constructed and substantially renovated homes used as a primary place of residence by an individual or qualifying relation of the individual:
- A new home together with land
- A new home together with leased land;
- A new mobile home or float home;
- Shares in a housing cooperative;
- A home constructed or substantially renovated by the owner-builder (90% test)
Example of the rebate for the purchase of a new home with land being sold from a builder:
Purchase price up to $525,000:
71.43% of the provincial portion of the HST (7%) but up to a maximum rebate of $26,250.
Same example but purchase price of $525,001 and up:
Flat rebate of $26,250.
ALL OTHER PLACE OF RESIDENCE LISTED ABOVE HAVE A DIFFERENT LEVEL OF REBATE.
Do not misunderstand the HST with the
Property Transfer Tax (PPT)!
As a Buyer and no matter what type of property you purchase, the PPT is a “one time only” tax
1% on the first $200K and 2% on the remainder
You might still qualify for the First Time Home Buyer Programme and therefore beneficiate from the exemption!
Click on this link to get more information about the PPT
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