Before you read any further, answer the following question: Is Harmonized Sales Tax (HST) applicable to the full purchase price of a resale home?
If you answered yes, then you and 56% of recently surveyed Ontarians are wrong! According to a recent Ipsos Reid survey*, 56% of a group of 830 Ontarians believed that HST is applied to the full purchase price of resale homes.
I was hosting an open house about a month before the new HST took effect and was told by a member of the public that HST was going to "kill" the real estate market since there would be an extra 13% on the purchase price of all homes. No matter what I said, he would not believe that the increased tax will ONLY be applicable to the various transactions fees associated with the purchase of a resale home. After he left I figured that once the new HST was introduced all would be cleared up. I was very surprised when I found out about the survey last week, 4 months after the introduction of the HST, and can only conclude that this confusion is helping to dampen the Ontario housing market and the economy as a whole.
* Ipsos Reid conducted the survey among 830 Ontarians between October 4th and 11th on behalf of the Ontario Real Estate Association.
