G77

Can someone explain to me what tax is payable on purchasing a new home in Ontario?

I've tried several times to read their website, but it spends so much time waffling about it not costing more under HST than it did before that I still don't know how much is payable.

There's rebates etc etc, bloody confusing

Help!

Tangram

Don't the rebates normally go to the builder ? Anyway, the contractor would be able to tell you I'm sure.

rich07

13% hst is payable. Homes up to $400k will get a 6% rebate (I think you claim this back on your taxes).

magnumpi

I also hear you can claim back a credit or allowance on the intetest paid on a mortgage for a house costing less than 1 mill

Anyone done this?

Auld Yin

I think you heard wrong. There is no mortgage interest deduction in Canada.

JonboyE

HST is only charged on brand new homes. If you are buying from an existing home owner then there is no HST.

This is the case in BC. There is no GST or HST on "used" homes anywhere in Canada. Unless ON has done something very strange with the provincial portion of the HST I will be surprised if there is any HST on "used" homes either.

If you are buying a new home to use as your principal residence there is a rebate of part of the GST if the house costs less than $450,000. If it costs less than $350,000 then you get a rebate of 36% of the GST. I am sure ON will have some sort of rebate for the provincial portion of the HST. It is usual for the builder to claim the rebate - look for the words "including net GST/HST" in the price. They will ask you to to sign a confirmation that you will use the home as your principal residence. If they don't, then you can make the claim.


There is a property transfer tax in many provinces that a buyer pays to have the house registered in their name. The current rates for Ontario are:

0.5% of the value of the consideration up to and including $55,000,
1% of the value of the consideration which exceeds $55,000 up to and including $250,000, and
1.5% of the value of the consideration which exceeds $250,000, and
2% of the amount by which the value of the consideration exceeds $400,000 for land that contains at least one and not more than two single family residences.

jezza99

dont bother come to ontario as premier dad is robbing us blind since he introduced the hst (gas price gone up up up ,hydro,food prices same way,have i missed anything,probably, o yeah car insurance,we can thank dalton for all that) it must be the most expensive province to live in and also the local municipalities have jumped on that same train. maybe the fall election will bring some change heres hoping .
in my short time here (5 years) my family budget has taken a major hit in the past 2 years especially. we are seriously looking at moving out west (wife has already job offer + relocation alowance) . so think twice before deciding on ontario did i mention the traffic,commute time in gta,anyways good luck because bad as it may be i still would not swap here for u.k. as you will find out canada is a fantastic country. welcome welcome

Tangram

The OP is already here and has been for some time.

iaink

HST replaced PST + GST
The PST has gone down a few % in my time here (compare with VAT!) , The majority of what I buy had both GST and PST anyway, so HST makes little difference except to heating oil.
In the long run it will help businesses save money and compete better. Remains to be seen if any savings will be passed on...

Inflation happens everywhere, and there is a general recession worldwide, so no economy is doing all that well. Cost of lving does seem to be taking more of a bite though.

Ontario Hydro is a mess, but its the consumers that will have to pay to improve infrastructure. Im not thrilled about it, but there's not much I can do about it. Moving provinces into the unknown seems an extreme solution. But then again, I agree about GTA traffic, its not for me. Big province away from the GTA though.

None of which has anything to do with the original question... as you were.

I see your sig file applies only to others eh

Ben W Bell

You've obviously never been to Quebec, and they're increasing their tax rate yet again in January.

HGerchikov

As already stated the HST only applies to the purchase of new houses (or potentially substantially renovated ones - i.e. the house has been completely gutted to such an extent that it may as well be a new build).

It the house you buy is subject to HST then there are two rebates which may be available to you in Ontario. There is the New Housing Rebate which is applicable to properties with a purchase price less than $450,000 and is applied against the federal portion of the HST. There is a further Provincial New Housing Rebate which applies against the Provincial portion of the HST up to a maximum payout of $24,000. Unlike the New Housing Rebate, the Provincial New Housing Rebate is offered regardless of the purchase price of the property.

And I agree - it is confusing. Much simpler to just buy a resale property and then you don't have to stress!

G77

Indeed!

Thanks for the replies - still don't think I'm much clearer.... So the GST portion has a rebate that I can claim and the PST portion the builder claims? So do I end up paying anything tax wise myself? Would be looking at a build in the $250k range.

What a mess!

JonboyE

If the place has a sale price of $250,000 then you will get a rebate of 36% of the Federal part of the HST. I.e. 250,000 x 0.05 x 0.36 or $4,500.

For the provincial part of the HST the calculation is: 250,000 x .13 x 8 / 13 x 0.75 = $15,000.

So the net price you pay is $250,000 + 13% = $282,500 - 4,500 - 15,000 = $263,000.

Usually the builder will claim both rebates.

For the sake of completeness and for anyone buying a more expensive home:

* The GST rebate is 36% of GST paid on a home up to $350,000. Above this the GST rebate is reduced and at $450,000 it is eliminated. I.e. if the purchase price is more that $450,000 there is no GST rebate at all.
* The rebate on the provincial portion of HST is limited to $24,000.

G77

Thanks Jonathan - I know you enjoyed working that out

I presume the tax you are liable for i.e. in this case $13k has to come out of pocket rather than from mortgage funding?

Auld Yin

The offer to purchase you take to the bank will show a sale price for mortgage purposes of $263,000 in the example shown.