I receive lots of questions about things to do with purchasing or selling a home, so I thought I’d start a new section on my blog, entitles ‘You Asked’.

Today’s question comes from Fred:

Hi,

What are the 2 taxes on house purchase in ontario?

I am trying to figure out what is important. I was hoping you might be able to give me some insight. Any help would be appreciated. Thanks.

Sincerely,

Fred

Well, Fred, if you are purchasing a resale home outside of the City of Toronto, and you are a Canadian resident, there is only one direct tax on your purchase, and that is the Land Transfer Tax – you can find calculation tables here. You will also be paying GST on the lawyer’s fees and on some of the costs you will pay via your lawyer.

If you are purchasing a resale home in the City of Toronto, you will be paying the City’s Land Transfer Tax; you can find more information on it, including rates, rebate information, etc. here

As to to the second part of your question, ‘ . . . . what is important?’, there are many other things to consider when buying a home, such as location, commuting time and distance, resale potential, how the home will fit your wants and needs, overall condition of the home, the neighbourhood, and lots more. If you’d like a no-obligation 30-minute consultation to discuss this, give me a call at 905-208-7002, or send me an email to chris@chrisnewell.com.

Thanks for the question Fred.

Ontario to provide 75 per cent tax rebate on first $400,000

ROBERT BENZIE
QUEEN’S PARK BUREAU CHIEF
Premier Dalton McGuinty’s Liberals are sweetening the pot in a bid to make the controversial harmonized sales tax more palatable to Ontarians.

In a surprise move this morning, the government announced it was capitulating to homebuilders’ demands by effectively reducing taxes proposed on new homes.

Under the change, buyers of new homes in all price ranges would receive a 75 per cent rebate of the 8 per cent provincial portion of the HST on the first $400,000 of the cost.

In the March 26 budget, Finance Minister Dwight Duncan had said that while people purchasing new homes costing less than $400,000 would be eligible for the tax break, those buying more expensive homes would get little relief.

It would have been a recipe for disaster for consumers and developers because there would be a gradual increase in taxes on homes costing between $400,000 and $500,000 and a massive one on those priced above $500,000.

For residents of Greater Toronto, where homes are more expensive than in the rest of Ontario, it would have been especially onerous.

“During these challenging economic times, the McGuinty government’s enhanced housing rebate would improve affordability for more homebuyers – increasing the most generous housing rebate of its kind in Canada,” Duncan, who was not available for comment, said in a news release.

The Liberals also announced a new rebate to encourage builders to construct rental housing units.

The HST, which will blend the 8 per cent provincial sales tax and the 5 per cent federal GST, is to come into effect July 1, 2010.

Since it was announced early this spring, the government has weathered an avalanche of criticism because the business-friendly levy will increase taxes on gasoline, heating fuel, funerals, newspapers, fast-food value meals, legal services and a slew of other things.

A Toronto Star-Nanos Research poll last month found 67 per cent of people polled have a negative view of the melded tax compared to 23 per cent seeing it as positive and 10 per cent unsure.

The Canadian Association of Accredited Mortgage Professionals (CAAMP) has just released a report on the state of the mortgage market, including results from a consumer survey plus some forecasts.

You can download the report here, and check back over the next couple of days for my commentary.

We had a record turnout at the Millionaire Real Estate Investor seminar in Milton tonight!! Here are some comments from a couple of the attendees . . .

This CRITICAL INFORMATION was lifted from the blog of an associate, Richard Silver, an extremely talented, creative and concerned Realtor and citizen of Toronto. You can find Richard at his blog Torontoism

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A REALTOR friend of mine, Trish Santos, a Sales Representative with Realty Executives Plus Ltd., has done some serious due diligence on the proposed harmonization of the GST and PST. One of my concerns is that the Provincial Government has slipped this in under the new Budget without proper input from the Public. Here is some of the concerns that we both share. Please give this a read if you think this harmonization is “good for the Province”.

As hopefully most of you are aware the Ontario Government is looking to pass their budget which includes harmonizing the GST and PST together effective July, 2010.
Dalton McGuinty and his Liberal caucus want us to believe that this will help our economy, create jobs and put money back into our pockets.
The only exceptions are: children’s clothing and shoes, child car seats and boosters, diapers, feminine hygiene products, books, and new homes costing under $400,000.
Buyers of homes costing $400,000 to $500,000 can claim a proportional tax credit.
To offset the fact that taxes will rise on nearly everything from Big Macs to new homes costing more than $500,000, families earning $160,000 or less annually will receive $1,000.
The Ontario Government will be sending out ONE TIME ONLY cheques in June 2010, December 2010, and in June 2011 – conveniently just three months before the next election. Single Ontarians earning $80,000 or less will receive three $100 cheques for a total of $300.
So for the ONE TIME ONLY rebate from the Ontario Government it will permanently cost us an 8% increase in everything that we do!  Sounds like a fair trade off?

The previous costs are only the tip of the iceberg!  Any other user fee or service that has had only GST (5%) added to the totals will now be increased by another 8%!  That includes:   Accounting fees, legal fees, lawn care programs, any construction/renovation, trades persons, repair charges, sporting activities, extra curricular activities for your children or yourself, auto service, medical/holistic, chiropractors, massage therapy, vet bills, hair cuts, manicures, recreational activities, bus fares, audio books for the blind, tuition fees, day care, real estate commissions, insurance, Energy Star appliances, postage stamps, theatre admission, fast food under $4.00,  footwear less under $30.00 and so much more right down to the day you die, your funeral costs!
Please take the time to calculate what your own cost are and you will be shocked at what it will mean to you on a yearly basis.
This ONE TIME payment from the Ontario Government is an insult to Ontarian who will have to bear the burden for a lifetime of increased taxes.
I urge every one of you to send a letter clearly telling our Government that they are going too far with the implementation of the HST and that you DO NOT want it before it’s too late.

Please take the time to write to you local MPP and send a copy to Premier Dalton McGuinty and Finance Minister Dwight Duncan:

Hon Dwight Duncan – Contact Information
dduncan.mpp@liberal.ola.org
Ministry  Ministry of Finance
7th Floor, Frost Building South
7 Queen’s Park Crescent
Toronto, Ontario M7A 1Y7
Tel  416-325-0400
Fax  416-325-0374
Ministry   Ministry of Revenue
6th Floor, Frost Building South
7 Queen’s Park Crescent
Toronto, Ontario M7A 1Y7
Tel  416-325-0400
Fax  416-326-9331
Hon Dalton McGuinty – Contact Information
Queen’s Park   Room 281, Main Legislative Building, Queen’s Park
Toronto, Ontario M7A 1A1
Tel  416-325-1941
Fax  416-325-3745
Constituency   1795 Kilborn Avenue
Ottawa, Ontario K1H 6N1
Tel  613-736-9573
Fax  613-736-7374
dmcguinty.mpp.co@liberal.ola.org

All current MPP members can be found at http://www.ontla.on.ca/web/members/members_current.do?locale=en

The Honorable Jim Wilson of Simcoe-Grey has also a petition that you can sign www.jimwilsonmpp.com

Remember this is a permanent tax that will not be reversed and all of us will suffer for it.