I’ve received a number of messages this week asking about the HST and house resales and also about capital gains tax on new and resale homes. Relax, There are more important things to think about when buying or selling. For Buyers; Buy well. Buy a good home. For Sellers; Sell fair and sell quickly.
Regarding Capital Gains Tax and Ottawa Homes: If your home is a principal residence it is exempt from Capital Gains Tax unless you have made multiple sales in the last number of years. Call me about that for my thoughts.
Harmonized Sales Tax or HST will be charged on most goods and services in Ontario begining on July 1, 2010.
For resale homes there is no HST applicable on the house price but for new home purchases closing after July 1, HST will apply then just as GST is currently applied to NEW homes and New condos.
Real estate services will be subject to the new HST but bear in mind that real estate services in Ottawa are charged GST now and have been for years. So there will be an additional 8% added to the current 5% making a total of 13% added to service fees.
Lawyer’s fees, Real estate commissions, home inspections that have GST now will change to HST after July 1, 2010. It is estimated that the average increase in costs for Buyers and Sellers will be about $2000 over what they would have previously paid. So, my thoughts are it’s a conscern, but not a show stopper.
The investor’s time proven advice; buy low and sell high, to it I’ll add; Do it now. The average real estate transaction in Ottawa takes from 30 to 60 days and there are 94 days and counting to July 1,2010.