An Ipsos Reid survey commissioned by OREA and released in October reveals that 56 per cent of Ontarians mistakenly believe that the new Harmonized Sales Tax (HST) applies to the full purchase price of a resale home. In fact, the HST is only levied on the various transaction
fees associated with the purchase of a home that has been previously occupied (i.e. not a newly-built home).
Currently, the average price of an Ontario resale home is around $330,000. Therefore, this confusion leaves the majority of Ontarians wrongly believing that the HST will add more than $40,000 to the transaction cost. There is growing concern among real estate professionals that this misperception about the HST is dampening the Ontario housing market.
“We see it on the front lines every day. Clearly, Ontarians still don’t know what the HST covers and what is exempt,” said Dorothy Mason, President of OREA. “This is not helping the housing market and it’s not helping the Ontario economy. This confusion means that many buyers think the cost of a resale home is tens of thousands of dollars higher than it actually is.”
OREA is calling on the Government of Ontario to launch a public awareness campaign to clear up the HST confusion among potential homebuyers.
“We’re doing our part to inform our clients, but we shouldn’t have to do it alone. We’re calling on the Ontario government to launch an immediate public awareness campaign to educate taxpayers and end the HST confusion,” said Mason. “For average homebuyers, learning that the HST does not apply to the full purchase price means a $40,000 saving they weren’t expecting.”
Visit OREA’s YouTube site to see of a video of OREA President Dorothy Mason discussing the