Residential Propety Taxes in Toronto and HST: expenses for you.

You knew there would be…..HST is coming to town
GST- Is the property a resale or new construction. Resale properties are not subject to GST. New construction is. The GST can be included in purchase price OR in addition to.

You’ve probably heard in the media about the much dreaded “HST”. Were just beginning to learn about how this will work. Here’s what we’ve learned to date as far as the housing market is concerned:

HST-this is new and will increase taxes to 13%. This will apply to new homes being purchased after July 1st 2010.
On a purchase of 500k, additional tax is 40k. Builders will apply for 2 percent tax credit on supplies-10k. Now 30k owing. There is going to be a max 24k rebate on a 400k plus purchase. So effectively you will owe 6k more in taxes. Doesn’t sound that high right? Well, most new homes in this city are above 400k. Let’s look at a 1Miliion dollar home purchase with the new HST. You can go ahead and add another 36k on sticker price!!

HST on resale puts a small dent in your pocket in increased tax on legal fees, moving costs, etc.


The concerns some have with the HST include:
How will it affect builder’s quality as they try to keep asking prices lowered
How will this affect interest of buyers of new homes


Red Flag: Property Taxes. MLS will point out property tax bill. You want to pay attention here.

In 2005, MPAC valuated properties in the city. These valuations became the basis for applying the tax rate to. In Jan 2008, MPAC reassessed most properties in the city and in most cases the valuations went up with the market. The 2008 valuation difference above the 2005 valuation is then split in 4 equal amounts and from 2009-2012 inclusive the equal amounts will be placed on top of the 2005 valuation amount to gradually increase taxes owing according to tax rate. In 2009, if seller is posting a tax amount on MLS, it may be according to a 2005 valuation. This is important to note as it will up your annual tax bill for property. Again, stay ahead of your competition with your knowledge!


It's being debated that with Canada looking to reduce its budget deficit per GDP, governments will cut spending and look to increase revenues. HST is one source, but a further hike in property taxes is certainly a means to get more money in the governments accounts.

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