Posted by: Daryl & Wendy Ashby | February 10, 2010

Pending HST

While the dreaded HST is still awaiting final legislative approval, there are a few aspects you should be aware of, which might affect your next purchase or “significant improvement to your existing home”.

Firstly, if you are purchasing a new home and you’ve signed the agreement for Purchase and Sale prior to November 18, 2009, but will not take possession until after July 1, 2010, you will not pay HST, as your rights are grandfathered, but the current GST rules will still apply.

In contrast if your agreement to purchase was signed after November 18, 2009 and occupancy will not be until after July 1, 2010, then HST will be payable.

This is a major factor when it comes to the amount of your own money that you “may” need up front. As yet the lending institutions are still undecided as to whether they will allow the added tax to be paid with mortgage funds. It is likely they will in the end, but the jury is still out.

Secondly, there will be GST and HST rebates that you can avail yourselves of. The maximum HST rebate will be available on the sale of a new or substantially renovated home valued at $525,000 or above. It is on homes of this value or greater that the rebate will be fixed at $26,250.

For all other cases, the rebate will be caluclated as 70.43% of the PST portion of the 12% HST tax.

Are you confused. Well join the club.

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