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HST Clarification - Homes Under $400,000

UrbanVigor

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There appears to be a lot of vague info relating to the HST on new homes under $400,000.

My understanding is that there is a rebate of 75% in which case I would expect that there would still be a portion of HST to be paid. However, then I read that the province announced that HST would only be charged on the amount of the purchase price that is over $400,000.

What would benefit me most is if someone could provide the actual HST calculation on a new home under $400,000, say $390,000. (It may benefit others as well if they could see the calculation applied to a $450K home and to a $550K home). I assume GST would have to be backed out of the purchase price? Seeing the calculation would make it most clear.

Also helpful would be a link to the info that is most clear and concise and from a reliable source. I found this (http://blog.livehigh.com/2010/02/latest-buzz-hst-explained.html) and it seems to answer my question on the calculation but then I don't understand any claims that HST would only be charged on the amount of the purchase price that is over $400,000...

Thanks in advance! I hope this helps others too.
 

KA1

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There are two(2) components of HST -- Federal GST of 5% and Ontario Retail Sales Tax of 8% making a total HST of 13%.

Ontario government will give a rebate of 75% of 8% for a unit costing up to $ 400,000. The reason refund of 75% of 8% is that, previously, a builder had to pay PST on certain of its purchases. This PST eventually gets into the cost of the unit. By giving refund of 75% of 8%, Ontario government is ensuring that it gets its share of PST. Also it does not collect extra tax on the unit.

If you are buying a unit to live in, then, you will get a rebate on GST as well from the builder at the time of closing.

For further information on rebate of Ontario portion of HST, you can call 1-800-337-7222 or go to the web site rev.gov.on.ca/en/tax change. You will have to do a lot of search here.

Federal government number to contact is 1-800-9529-5525
 

Kenny

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http://www.rev.gov.on.ca/en/taxchange/taxable.html

The new housing rebate will be 75 per cent of the Ontario component of the HST, up to a maximum of $24,000. The rebate will ensure that buyers of homes priced up to $400,000 will, on average, pay no more tax than under the RST system. However, applicable RST on building supplies is embedded in the price of the home.

Under the old system, you would have paid 5% GST, or $20,000 on a $400,000 house.
Under the new system, you will pay 13%, or $52,000, and receive a rebate of $24,000, so you end up paying $28,000, which is $8,000 (2% or 1/4 of 8%) over the old system.

On a 390,000 you will pay $50,7000 (390,000+13%) and get a rebate of 23,400 (6% of 390,000).

On 450,000, pay 8,000 (2%) on the first 400,000 and 6,500 on the other 50,000 for a total of 14,500 hst.
On 550,000, pay 8,000 (2%) on the first 400,000 and 19,500 on the other 150,000 for a total of 27,500 hst.
 

AKS

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I'm not sure if this will help but it might give you an idea.

figure out the cost of your house, subtracting the GST.
http://www.gtaproperties.com/gstcalculator.asp

Choose your province and input the cost of your house before GST and you will have the cost of the HST.
http://mindprod.com/applet/canadiantax.html

Minus the $24k rebate. As for the 2% PST the builders are suppose to give back to buyers. I've read the builders may or may not reimburse you.
 
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