Realtors fight sales tax harmonization
Ontario's Realtors say the McGuinty governments plan to harmonize the GST and PST will add over $2,000 to the cost of a real estate transaction, hurting the resale home market and prolonging the housing industry's recovery from the current economic downturn.
"Now is not the time to be erecting barriers to homeownership," said Pauline Aunger, President of the Ontario Real Estate Association. "We need consumers to invest in housing to help get our economy going again."
According to the Canadian Real Estate Association, home sales in the province of Ontario were down 29 per cent in February, compared to 2008.
Under a harmonized sales tax (HST: 13%), home buyers and sellers will have to pay extra tax on a range of services associated with real estate transactions such as legal fees, moving costs, real estate commissions and home inspection fees. Currently, consumers only pay the 5% Goods and Services Tax on these services.
"These additional taxes could price some homebuyers, especially first-time homebuyers, right out of the market," explained Mrs. Aunger. "Harmonizing will not help homebuyers in any way."
For a resale house priced at $360,000, a HST could add over two thousand dollars in new taxes to closing costs. In total, a HST will add $313 million annually in new taxes to resale home transactions.
"In the last decade, Ontario's homeowners have faced a barrage of new costs," said Aunger. "From municipal land transfer taxes to sky rocketing property taxes, homeowners are being pushed to the brink to accommodate increasing demands from government. A harmonized sales tax is yet another cash grab on Ontario's already overtaxed homeowners."
The Ontario Real Estate Association represents 47,000 brokers and salespeople who are members of the 42 real estate boards throughout the province. Members of the association may use the Realtor trademark.
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Notice no mention of the skyrocketing real estate commission fees among the challenges facing home buyers. I also love the line of logic that "getting Ontarians to invest in houses" will get the economy going again. We already have far too much of our savings and capital tied up in this relatively unproductive sector.
Posted by: Matt | Mar 30, 2009 11:53:47 AM
Perhaps it's a good time for Toronto realtors to reduce their unconscionably high fees.
Posted by: Toronto Real Estate Seller | Mar 28, 2009 7:39:05 AM