combined ontario taxes

[glashole]

any opinion to merging both the pst and gst?

[boxy]

I'm not sure yet how it will impact my bottom line, but i know that it will add 8% to the price of a new house, and it will add 8% more to the commission paid on a resale house. ie 5% commission on a $400000 house in Ontario is $20000 + 5% GST - $21000 total, if they harmonize the 2 taxes it would be $20000 + 13% GST/PST - $22600.
It will mean more paperwork for me, but if I can offset input PST credits with PST collected it may be worth it. It is going to suck for the consumer.

[Lenny]

The HST. We don't have it yet. (Harmonized Sales tax) I do remember when the dreaded GST (Goods and Services Tax) came in. It was an immediate EXTRA 7% hit on everything on Earth. For you USA folks, that combined with the then 7% PST (Provincial Sales Tax) basically meant that ANYTHING you buy was subject to a 14% tax.

The tag line at that time, 20 years ago, was that "goods" would DECREASE in price by about 7% as the manufacturer would be lowering their cost to the consumer. :rolleyes: Like that ever happened. :mad:

There can't be any good coming out of this Shea/Steve. Like before it is a smoke and mirrors game I believe and ultimately we'll be the losers. :yes:

On the bright side, I think our friends to the south will soon be getting used to new, increased taxes and then they will be able identify with our "Economy" a bit better :D and have conversations with us ...

[boxy]

Shea, here is the letter that our association has drafted to be sent to our local MPP's ......

Ms. Lisa MacLeod,
MPP - Nepean-Carleton
Queen's Park
Main Legislative Building Rm 347
Toronto
M7A 1A8

Dear Ms. Macleod

As a REALTOR® in your riding, I’m writing today to express my concern about the possible implementation of a harmonized sales tax in the province of Ontario.
As you know, the Premier has openly mused about the possibility of harmonizing the goods and services tax with the provincial sales tax and has done nothing to discourage speculation that harmonization may occur at some point in the future.

If that happens, it will have a devastating effect on the housing market, both new and resale.

I’m sure you’ve seen recent studies done by the Building Industry and Land Development Association indicating that harmonization would add tens of thousands of dollars to the cost of new housing in Ontario.

But harmonization would also have a dramatic negative effect on the resale housing market as well.

For example, harmonization would result in provincial sales tax being applied to legal fees, appraisal fees, real estate commissions, moving expenses, home staging services, landscaping and more services usually associated with real estate transactions. In addition, harmonization would result in the goods and services tax being applied to items such as mortgage insurance premiums and title insurance fees.

As you know, the real estate market has been hit hard by the current recession with unit sales dropping 25-50% in many parts of the province. Now is surely not the time to impose new taxes on the real estate sector when we need economic stimulus to grow the Ontario economy.

Please tell Premier McGuinty and Finance Minister Duncan that harmonization is bad for the housing market, bad for the Ontario economy and bad for consumers wishing to buy and sell homes in Ontario.



Yours truly,
Steve Boxma
2377 Pine Avenue
Manotick, Ontario
K4M1B4

------------------------

Feel free to modify it to your business, and MPP.

The Ontario Real Estate Association's position ......
http://www.orea.com/index.cfm/ci_id/12807.htm

[glashole]

I like the letter

from what i have heard, houses below 400000 are un "affected"

lenny apparently the smoke and mirrors is coming in the form of a $1000 cash back to everyone who makes less than 160000 a year

just can't see how this will benefit the average consumer over the long run

[yeller]

from what i have heard, houses below 400000 are un "affected". Yea, but if you live in any of the major cities, even in this economy, 400k doesn't buy you much.

[boxy]

I haven't seen anything about the $400K line ...

For a single detached house priced at $360,000 a HST could add $2037.25 in new taxes to closing costs (see Table 1). On average, a new HST would add $1731.00 in new taxes to Ontarians who buy or sell resale homes. In total, a HST will add $313 million annually in new taxes to resale home transactions.
It's a Liberal tax grab, pure and simple ....

Ontario’s real estate industry is essential to the provincial economy. In 2008, real estate in Ontario accounted for $56.6 billion in sales, $6.01 billion in ancillary economic spending and $1.35 billion in land transfer tax revenue to the provincial government. In addition, real estate employs 110,000 Ontarians directly and indirectly.
With respect to new housing , a study conducted by world’s largest real estate advisory group, Altus Clayton, indicated that a new HST would cause tax increases for new single detached homes ranging from $8,957 (Windsor) to $17,049 (Ottawa) outside the Greater Toronto Area (GTA), and from $24,566 (Mississauga) to a whopping $46,676 (Toronto) within the GTA. According to the Building Industry Development Association (BILD), a HST on new homes would cost Ontario home buyers $2.4 billion annually.
Altogether, a HST on new and resale homes could cost consumers $2.7 billion annually in new taxes.

The text in italics is from the link I posted above.

[boxy]

Yea, but if you live in any of the major cities, even in this economy, 400k doesn't buy you much.

Yeller, not including Condo's there are currently 2650 homes on the Ottawa Real Estate Board actively listed at $401K or less. There are 1137 homes listed at $402K or above.
There are 659 Condos at $401K and below, and 96 at $402 or above.

I could probably give you the Vancouver numbers in a couple of hours, it would just take an email to a buddy on the Left Coast.

[Tim Morris]

I like the letter

lenny apparently the smoke and mirrors is coming in the form of a $1000 cash back to everyone who makes less than 160000 a year



Shea, you're are a young guy - are you in 'a family way'????
That's a family statistic. If you're a lonely guy like me, it's
$300 for less than $80,000/yr.

[Tim Morris]

Yea, but if you live in any of the major cities, even in this economy, 400k doesn't buy you much.

No kidding. I bought a 20'x30' two story box in Toronto for $425K.
As that price, you would think you'd be able to live there, but not.

O.K. now, after I tipped in another $175K.

[gcarter]

Sorry to intrude (well, not real sorry), but this $400K number for housing....does this (seemingly) high number that high due to relative value due to exchange rates?

I know here in Florida you can buy a heck of a house for $400 K.

Just wonderin'.

[glashole]

but probably not downtown new york or right on the intercoastal

its all about location and proximity etc..


`George`
i forgot that i owe you a gift for the picture contest last year
I will get something down to you

have a good one

Shea

[Lenny]

George, median house prices here are about $550,000. or something like that.

http://www.vreb.org/mls_statistics/current_statistics.html

[glashole]

Victoria would be alot like toronto for having high housing costs

get an hour or so outside of the big cities and you can pick up a very decent home for 250-300

[yeller]

boxy, I know there are a lot of places for sale under 400k, but what I was getting at was there are a LOT of houses over 400k....and it's not just rich people housing. Tons of it is barely middle class. In Vancouver area, you'd have to be at least an hour out of the city to pick up a decent middle class home for under 400k

[boxy]

boxy, I know there are a lot of places for sale under 400k, but what I was getting at was there are a LOT of houses over 400k....and it's not just rich people housing. Tons of it is barely middle class. In Vancouver area, you'd have to be at least an hour out of the city to pick up a decent middle class home for under 400k

We are still pretty lucky here in Ottawa. Our Median house is at $265ish, $400 puts you in a nice single in a new neighbourhood. Established neighbourhoods in the core cost more, and estate lots/houses outside of the core cost more. $400K puts you in a 45x100 lot subdivision. I have some friends/clients who moved sideways from a walkout bungalow in PoCo BC on the hill into a 4200 sqft custom on 2 acres 30 minutes from anywhere in Ottawa. Moving West to here your OK, moving from the East to here really sucks.

[Lenny]

Boxy, our "Cottage" , 24' x 36' built in 1967 (and it is a definate, surfer type "Cottage" , no question ) with no Ferry service, was far more than the Victoria median. This is not a friendly "buyers market" here unless your Baby Boomer parents both kicked and left you something.

Being in your early 20's here and trying to settle down is IMPOSSIBLE without renting. Owning a Townhome/Condo is pretty much out of reach as well if you are young and unestablished.

Vancouver is far worse. :yes:

...but you know that :D ...

[boxy]

Boxy, our "Cottage" , 24' x 36' built in 1967 (and it is a definate, surfer type "Cottage" , no question ) with no Ferry service, was far more than the Victoria median. This is not a friendly "buyers market" here unless your Baby Boomer parents both kicked and left you something.

Being in your early 20's here and trying to settle down is IMPOSSIBLE without renting. Owning a Townhome/Condo is pretty much out of reach as well if you are young and unestablished.

Vancouver is far worse. :yes:

Lenny, our town, which has now become part of the City of Ottawa, is pretty much the same. $400K buys you a house with a 20 year old Kitchen and Bathrooms. I sold a house on the water last summer in our neighbourhood, failed septic system, small main house with 3 f@cked up additions, and 1978 original kitchen and bathrooms ........ $617000

[yeller]

We bought the house we're in now 1 1/2 yr ago for 655k....and that was a great deal. Realistically, it should have sold for 725. There has been a definate downturn in prices, but even so, we could still get 600k for it.......and it is no beauty. 2 bedroom + den, 1 bath, carport, no garage, 8yr old roof, single pane windows, 25yr old furnace, and non-functioning drain tiles. It was fully remodeled............30yrs ago. We do have a water view and are reasonably close to the downtown core.
The HST would take $ out of our pocket even as sellers. We'd have to decrease the selling price to offset the additional taxes to the buyer.

[CHACHI]

If you're a lonely guy like me

We should all be so lonely.

Ken