With HST tax coming into effect July 1st, many new home owners are wondering what exactly will be affected, and what won’t. Many household items that were previously subject to 8% provincial and 5% federal tax will now simply switch over to the 13% HST, and consumers will incur no additional costs. However, some items that were only subject to the 5% federal tax will now be subject to the 13% HST. In total, about 83% of products and services purchased by consumers will see no new tax.
What WON’T be affected:
- New homes under $400,000 (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 PST system. However, applicable PST on building supplies is embedded in the price of the home.)
- Cable TV and home phone services
- Municipal water
- Home maintenance equipment
- Repairs to free-standing appliances such as stoves, refrigerators, washing machines
- Home insurance
- Cleaning products
- Household and patio furniture
- Refrigerators and Freezers
- Books, newspapers and computer software
- Landscaping materials including sod, soil and plants
- Barbeques, lawnmowers, snow blowers
- Toys and outdoor play equipment
- Linens including towels and bedding
- Tools, such as shovels and rakes
- Building materials such as lumber and concrete
What WILL be affected:
- New homes over $400,000 (New homes purchased as primary residences, valued at $400,000 or more will be eligible for the maximum new housing rebate of $24,000.)
- Cleaning services (Changes from 5% to 13%)
- Electricity and Heating (Changes from 5% to 13%)
- Internet Access (Changes from 5% to 13%)
- Repairs by trades people (electrician/plumber/carpenter) to maintain or repair furnace, leaky faucets, toilets, electrical wiring, etc. (Changes from 5% to 13%)
- Landscaping, lawn care and private snow removal (Changes from 5% to 13%)
- Home renovations (Changes from 5% to 13%)
