The sales tax harmonization announced as part of the 2009 provincial budget will mean big increases in housing costs. But who will be hardest hit and by how much?
If you are buying a home that costs less than $400,000, you will pay the new tax but get a rebate. New homes that cost between $400,000 and $500,000 will get less money back. And those with a price tag of more than $500,000 will incur no refund at all.
Depending on where you're buying, analysts say that will mean a jump of between $12,000 and $47,000. That's on top of the thousands in land transfer taxes introduced last year.
"Make no mistake. This is a tax grab and people need wake up to that reality," noted Van Palmer of the Toronto Real Estate Board.
If you are buying resale, you too will be paying more. That's because the people who help you through the process will have to start charging PST as well. Insurance premiums, real estate fees and title insurance will all be going up with the harmonized sales tax.
Developers say this is no time to introduce a new tax, with the slumping economy. Julian Di Ciano of Dunpar Developments warns the construction industry will be hit hard by this.
"There are 325,000 jobs in the GTA directly associated with construction. You add a tax like that, it's going to cut that number probably in half."
It's bad news for buyers, but it could be bad news for renters as well. Some are predicting landlords will face new costs and pass those on to their tenants.