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Saturday, November 6, 2010

Canadian Mortgage Broker News - HST confusion abounds in Ontario

Canadian Mortgage Broker News - HST confusion abounds in Ontario

HST confusion abounds in Ontario
Thursday, 28 October 2010

It seems that the majority of Ontarians still don’t get it.

According to a recent Ipsos Reid survey, 56 per cent of Ontarians still mistakenly believe that the harmonized sales tax (HST) applies to the full purchase price of an existing home.

In truth, the tax only applies to the transaction fees for existing homes, and applies to the full price for new homes.

Since the average price of a resale home in Ontario is roughly $330,000, the majority of the survey’s respondents thought they would have to pay an additional $40,000 to purchase the home, according to the Ontario Real Estate Association (OREA).

The association says the province’s Realtors are become increasingly concerned that this persistent confusion is in fact dampening the 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," OREA President Dorothy Mason said in a news release. "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.

"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.

Ipsos Reid surveyed 830 Ontarians, between October 4th and 11 th, on behalf of OREA. The estimated margin of error is +/-3.8 percentage points, 19 times out of 20.

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