Ontario Tax Sale Property Forum
Tax Sale Forum => Questions and Answers => Topic started by: Ion on April 05, 2009, 01:26:16 AM
-
HST will be imposed by July 1, 2010.
I am curious if the new rules about HST would be applied to tax sales or buying any land or a hobby farm in Ontario.
-
Anything (aside from a small list of items) with GST previously will now cost 13% instead of 5% . So your lawyer fees will increase, searches will increase in price, home inspection, gas, etc.
Buying land resale land no gst. Buying a new home gst (over 500,000 (there is a sliding scale between 400,00 and 500,000 where you would pay a certain amount)). If you pay gst now you will pay 13% instead of 5%.
-
Anything (aside from a small list of items) with GST previously will now cost 13% instead of 5% . So your lawyer fees will increase, searches will increase in price, home inspection, gas, etc.
Buying land resale land no gst. Buying a new home gst (over 500,000 (there is a sliding scale between 400,00 and 500,000 where you would pay a certain amount)). If you pay gst now you will pay 13% instead of 5%.
We have the worst Ontario government of all time. Even worse than Bob Rae's NDP.
So here is McGuinty's logic:
We have a bad recession and they decide "hey.. lets tax people more.. that shouldn't hurt the economy".
Then last week while the auto sector is in a dire situation.. "hey.. lets spend 30 billion on transit so that people won't need to use cars in the GTA"
-
Anything (aside from a small list of items) with GST previously will now cost 13% instead of 5% . So your lawyer fees will increase, searches will increase in price, home inspection, gas, etc.
Buying land resale land no gst. Buying a new home gst (over 500,000 (there is a sliding scale between 400,00 and 500,000 where you would pay a certain amount)). If you pay gst now you will pay 13% instead of 5%.
As I understand it, the rules as they currently apply to GST will simply be changed to reflect 13% instead of 5%. If you buy a resale home today, you don't pay anything, and it should remain that way. If you purchase a newly construction home from a builder, then there is a GST applicable ...not 5%, but rather 62% of 5%...there is a rebate which the builder gets, that makes it so that the taxes you paid on the new home equate to what you used to pay if Federal Sales Tax (ie. pre GST). That rebate to the builder begins to fate between $350,000 and then vanishes for newly constructed home that exceed $400,000.
The Provincial government, wanting to keep in step with the Feds, said: yes, we want to make sure that taxes on newly constructed homes remain low, even with harmonization...we will therefore following the lead of the Feds...they figured that there was an effective pst rate of 2% on the average new home being built (for the materials of course), and they then said we must have a rebate of 6% on these new homes. All was good, except that someone, said, you know the Feds based their rebate threshold (amount above which you could afford to pay more), at $350,000...but that is a federal average, in Ontario homes are worth more....lets make the rebate fade away between $400,000 and $500,000.
Home builders across the country have been screaming at the Feds for years, since the $350,000 threshold they set, at the inception of GST has never been increased (even though they promised to review it regularly)...this should give the Feds a little incentive to really harmonize and increase their level a little.
-
Speedfreek,
As i see it this was one of McGuinty's best moments. The idea of the HST is that business will be allowed to claim that all back, whereas now they only get the GST and a the small PST rebate. The idea is to make businesses more competitive and attract other businesses. This is also done by the reduction in corporate taxes.
This will also allow them to save costs as everything will be handled by CRA, much as they have recently done with corporate taxes.
-
Speedfreek,
As i see it this was one of McGuinty's best moments. The idea of the HST is that business will be allowed to claim that all back, whereas now they only get the GST and a the small PST rebate. The idea is to make businesses more competitive and attract other businesses. This is also done by the reduction in corporate taxes.
This will also allow them to save costs as everything will be handled by CRA, much as they have recently done with corporate taxes.
Believe me, I know there is a marginal benefit to businesses. I earn most of my income through my corporation.
However, I think it is bad for the overall picture when this effectively reduces the total amount of after tax income available for consumers to spend (including myself, the business owner). The reduction is corporate tax is fairly negligible. Besides, most corporations pay very little tax at all (if any) once all of the deductions are made. That is the whole point of a most structured corporations.
-
There was a backroom deal done on this! My wife recently retired from working for a small company with millions in sales, & did all the tax filings; she says the touted savings for small business is complete and utter BS, as evidenced by the bribe offered: when did the Feds ever do any such thing before? It only shows how important it is: up the tax take for the Feds because the economy was going away, and throw the Province a financial bone by actually giving us monies that were announced years ago. If only we could dole out our tax money as do the Feds: we could keep announcing that we were going to faithfully pay up our taxes within 3 years, and keep skating the way they do.
If the public swallows the bribe/handout offered, WE ARE SCREWED. I don't hold out much hope, as Canadians in general have been convinced they are sheep, and act accordingly.