General Information on the HST
HST= 13%
-Combination of the current 8% Provincial Sales Tax and the 5% federal GST creating a 13% Harmonized Sales Tax (HST).
-The HST will come into effect on July 1, 2010- however, some transitional rules will apply*(see below).
-The HST will be federally administered and collected by the Canadian Revenue Agency.
-HST applies to supplies made in Ontario, that are currently subject to GST- this includes supplies of goods, services, real property and intangible property, such as contractual rights and patents.
-HST does not generally apply to supplies that are exempt or not subject to tax for GST purposes or supplies made outside Ontario.
-Suppliers generally begin charging HST on or after July 1, 2010, except in the specific situations falling under the transitional rules*.
The HST will not be charged on the following items that are currently not subject to PST:
- Basic groceries
- Prescription drugs
- Certain medical devices
- Child care
- Residential rents
- Municipal public transit
- Most health and education services
- Legal aid
- Most financial services
- Tutoring
- Music lessons
Consumers will not have to pay the provincial portion of the HST for:
- Qualifying prepared food and beverages sold for $4.00 or less
- Print newspapers
- Children's clothing and footwear
- Children's car seats and car booster seats
- Diapers
- Feminine hygiene products
- Books (including audio books)
HST and Real Estate
HST will apply to:
-the purchase of newly constructed or substantially renovated homes, however homebuyers will be able to claim a rebate of some of the provincial portion of the tax for new homes. Properties priced up to $400,000 would not be subject to additional tax , a proportional tax rebate will apply to purchase of new homes priced between $400,000 and $500,000. All new homes purchased as a primary residence across all price ranges would qualify for a rebate of up to a maximum of $24,000.
-the services associated with the purchase of new and re-sale homes, such as real estate commissions, legal fees, home inspection fees and moving costs.
-a builder's sale of a newly constructed or substantially renovated residential complex (including apartment buildings and condominiums).
-commercial property rentals and leases.
HST will not apply to:
-the purchase of re-sale homes (sale of housing that has been previously occupied by an individual as a place of residence and that is exempt from GST would also be exempt for purposes of HST)
-residential rent
-condominium fees
-home insurance (which has been subject to PST, but not GST)
-mortgage interest costs
-Canada revenue Agency's current policies regarding application of GST to housing would generally apply under the HST.
*Transitional rules For some purchases of new homes that straddle the implementation date of July 1, 2010, the provincial portion of the HST will not apply, depending on when the written agreements of purchase and sale were entered into and when ownership or possession are transferred.
