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Wednesday, June 30, 2010

HST changes will effect new homes over $400,000

The HST comes into effect tomorrow and the following 2 things will effect Ontario's real estate market:

1. New homes with a value of $400,000 or more will see a change. New homes with a value under $400,000 will be uneffected. The resale of old homes will also be unaffected.

2. The taxes on real estate commissions will increase from 5% GST to 13% HST.

There is however a rumour in the works that Ontario may cut HST by 1% by 2011 by cutting back on the PST portion of the HST, lowering the total HST to 12%.

At the same time expect to see more tax breaks for your income taxes. The HST change was designed in combination with a slew of income tax reductions which will allow more lower and middle-class people in Ontario to pay their bills, their mortgages and have more spending money. The HST is "virtually revenue neutral".

The people whining about the HST are mostly rich people who will now have to pay more for the following services:

Dry Cleaning Service.
Maid / Cleaning Services.
Massage Services.
Tobacco & nicotine products.
Golf fees.
Gym memberships.
Lessons for sports (ie. soccer, ballet, karate).
Fitness trainers.
Hair salons & barbers.
Vitamins.
Live theatre tickets.
Repair & renovation work by Plumbers, Electricians, etc.
Landscaping and Snow Removal.
Hotel Rooms.
Taxis.
Funeral services.
Legal fees.
Domestic Travel in Ontario (railways, air & bus).
Magazine subscriptions.
Private resale of cars (with registration).
Ice rink rentals.
Hunting/fishing licenses.
Gasoline and diesel.
Natural Gas & Electricity.

The final two aspects of it is to encourage more people in Ontario to add solar panels, windmills and/or geothermal heating for their homes) and to think more wisely about their automotive purchases.

On the plus side the following will actually decrease in price!

Alcohol.
Movie tickets.
Sporting event tickets.

I frankly support the HST. I totally support anything that puts more of the tax burden on the rich and makes it easier for lower and middle-income earners.

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