The HST is coming! The HST is coming!
Okay, but what is the real impact going to be for buyers and sellers of real estate? Let me help!
Buyers will pay HST on their legal fees, moving services and anything else associated with their move. If these were products, say like some new furniture or some paint then the buyers were already paying both GST and PST. But, if these were services like legal services, moving services or painting services then those items will have an increase of 8% due to the new tax.
Buyers of resale homes don’t pay the real estate commission. Its paid for by the seller.
So, the home sellers will see an increase in the cost to sell their home. That’s a further hit of 8% of the commission. So how much is that really, in dollars and cents? I have provided the following chart that shows the impact of the HST tax for home sellers at various home price points. This chart assumes a 5.0% commission rate. Your rate may be different.
This will impact the final selling prices and what a homeowner would accept on the sale of their home.
Now for the good news… If you are thinking of selling your home in 2010, be sure to ask me about how I can give you a break on this tax. I’m not ready to post it here, but I can tell you about it if you are going to sell your home.