First half of May sees increased sales in the GTA. However, will this trend continue? We may see some jump in sales for homes (more so, new homes) over 400-500K in the coming months owing to HST, that is likely to be imposed beginning July next year.

Here is the media release from TREB about mid May stats:

Greater Toronto REALTORS® reported 4,561 transactions in the
first half of May – an increase of three per cent compared to May 2008.
“Members reported a rise in buying activity this month,” said TREB President Maureen O’Neill.
“Many home buyers who were undecided about purchasing a home during the winter months are now proceeding with confidence as a result of the GTA housing market's affordability.”
The average price for MLS® sales was in line with last year, down by less than one-half of one per cent at $399,811.
“More sales and fewer listings resulted in tighter market conditions which pushed the average selling price back up to last year's level,” according to Jason Mercer, TREB’s Senior Manager of Market Analysis. “Look for new listings to increase as home owners react to the positive news surrounding home sales and prices.”

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Rajeev Narula, Broker, REALTOR®
ACE TEAM REALTY INC., Brokerage
10 Kingsbridge Garden Circle, Suite 704
(Opp Square One - HWY10/403)
Mississauga, ON L5R 3K6
Bus: 1-888-355-3155 Ext. 300
Fax: 1-888-443-3155
Email:
Web: http://www.RAJEEV.ca" rel="nofollow">LINK

Rajeevbhai,

What is this HST chakkar?

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A Proud Indian Canadian

Garvo,

Beginning July 1, 2010, GST & PST will be merged together to 13% and be levied as HST (Harmonised Sales Tax). Currently, for a brand new home, there is no PST, only GST. When HST comes into effect next year, all new homes under 400K will be taxed as they are according to the current regime, i.e. 5% HST (for the GST portion). Homes above 400K and less than 500K will be taxed at a rate above 5% but less than 13% (rate has not been fixed yet). The killer is the homes above 500K, that will be taxed at 13% instead of 5% as done currently. Meaning, presently you pay $20,000 as GST for a home that is priced to sell at 520,000. However, next year, you will be paying 565,000 for the same house, an increase of 45,000 in Taxes. Besides this increase, any extras that one undertakes will be taxed at 13% too. Currently, there is no PST on renovation/labour costs etc., but with HST, you will be paying 13% on everything (except for a minimal list of exempt items).

For resale homes, lawyer, insurance, real estate commissions, home inspections, home staging etc all will cost more as the professional services tax will jump from 5% to 13%.

It is amazing that Ontarions have been very meek and weak in voicing opposiotion to this tax grab. I remember, a little while ago, McGuinty wanted to impose some restrictions for young drivers and they used FACEBOOK to organise a movement and McGuinty had to reconsider his decision and backtracked. Ontarion Real Estate Association has started similar group on facebook and has been urging Ontarions to write to their MPP. Me and my wife have written seperately to our MPP Mrs. Amrit Mangat and so have lots of my friends. Here is the link, in case someone wishes to do that too: http://www.orea.com/index.cfm/ci_id/12809/la_id/1.htm

McGuinty has been facing some adversity from some of his caucus members. His government is planning to come up with regulations whereby, retailers will have to display the total price of the goods (like the way it is done in Delhi, UK, France etc). ...so when people don't see HST on the bill, they will never know that it was actually been collected by the retailer. How cunning!!



Together, we can make a difference.

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Rajeev Narula, Broker, REALTOR®
ACE TEAM REALTY INC., Brokerage
10 Kingsbridge Garden Circle, Suite 704
(Opp Square One - HWY10/403)
Mississauga, ON L5R 3K6
Bus: 1-888-355-3155 Ext. 300
Fax: 1-888-443-3155
Email:
Web: http://www.RAJEEV.ca" rel="nofollow">LINK

Quote:

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Originally posted by Rajeev Narula
It is amazing that Ontarions have been very meek and weak in voicing opposiotion to this tax grab. I remember, a little while ago, McGuinty wanted to impose some restrictions for young drivers and they used FACEBOOK to organise a movement and McGuinty had to reconsider his decision and backtracked.

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However, next year, you will be paying 565,000 for the same house, an increase of 45,000 in Taxes. Besides this increase, any extras that one undertakes will be taxed at 13% too. Currently, there is no PST on renovation/labour costs etc., but with HST, you will be paying 13% on everything (except for a minimal list of exempt items).

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so when people don't see HST on the bill, they will never know that it was actually been collected by the retailer. How cunning!!

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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."

-- Rhett Butler in "Gone with the Wind"

Patrickm

I think you misunderstood the whole concept. Going by your logic, isn't it the other way round that the people buying homes worth more than 500K are the ones who are subsidising the ones who buy homes under that value?..or in other words, bearing the burden of paying higher taxes everytime. In the GTA, more so in Mississauga, Richmond Hill, Vaughan, one will have tough time to find a new, decent size detached for under 450K. Homes under 400K are either small or not in desired neighbourhoods.

In my opinion, it is a matter of fairness. Asset purchases are made from after (income) tax dollars. Income tax slabs, as you know, tax you more if you make more, thereby, one has already \"subsidized\" the services for other low income population and paid more than fair share of taxes.

Quote:
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However, next year, you will be paying 565,000 for the same house, an increase of 45,000 in Taxes. Besides this increase, any extras that one undertakes will be taxed at 13% too. Currently, there is no PST on renovation/labour costs etc., but with HST, you will be paying 13% on everything (except for a minimal list of exempt items).
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And how would that be different from paying 13% for everything else, including basic, essential items?

UNQUOTE
Not very different except for that repairs of home, cars, gasoline bills, services, lawyer fees etc., that attracted 5% GST until now, will be taxed at 13% HST. With gasoline & repair costs going up by 8%, what kind of rippling effect it will have on the prices of general commodities? Don't you think it will also lead to "underground" economy as people may start doing business in "cash" to avoid paying hefty 13% to contractors, tradesmen etc.

Lastly, GST collected by a business is payable to the government minus GST spent by the business for its operation. Example, if a business collects $100 in GST and also paid $40 GST in its business operation, it will only have to pay $60 to the government. I am not a collector of PST, and not an accountant either, therefore I cannot shed much light on the way PST is treated.

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Rajeev Narula, Broker, REALTOR®
ACE TEAM REALTY INC., Brokerage
10 Kingsbridge Garden Circle, Suite 704
(Opp Square One - HWY10/403)
Mississauga, ON L5R 3K6
Bus: 1-888-355-3155 Ext. 300
Fax: 1-888-443-3155
Email:
Web: http://www.RAJEEV.ca" rel="nofollow">LINK

Remember the previous recession, when prices of average homes decreased for seven consecutive years before rebounding.

So far, consumers have not had one complete year of falling prices.

This year is expected to be the first, with the Canada Mortgage and Housing Corp. forecasting that the average price of a home will fall by 5 per cent by the end of 2009 to $360,000.

As a result, economists say there is more risk facing the housing market and a pullback may be coming.

Housing analyst Will Dunning says spring buyers are experiencing what he calls an "affordability effect," a spurt of sales that typically lasts only a few months due to much lower mortgage rates.

The key question is whether consumer confidence holds once the affordability effect wanes, and given that the recession is not over yet, not sure confidence is going to be that bubbly.

Still, if mortgage rates remain at low levels while housing prices continue to fall, the real winners may well be the ones who wait it out.

Keep well,

Quote:

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Originally posted by Rajeev Narula
isn't it the other way round that the people buying homes worth more than 500K are the ones who are subsidising the ones who buy homes under that value?..or in other words, bearing the burden of paying higher taxes everytime.

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Quote:

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In my opinion, it is a matter of fairness. Asset purchases are made from after (income) tax dollars. Income tax slabs, as you know, tax you more if you make more, thereby, one has already \"subsidized\" the services for other low income population and paid more than fair share of taxes.

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Quote:

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Not very different except for that repairs of home, cars, gasoline bills, services, lawyer fees etc., that attracted 5% GST until now, will be taxed at 13% HST. With gasoline & repair costs going up by 8%, what kind of rippling effect it will have on the prices of general commodities? Don't you think it will also lead to "underground" economy as people may start doing business in "cash" to avoid paying hefty 13% to contractors, tradesmen etc.

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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."

-- Rhett Butler in "Gone with the Wind"