Be aware of important 2010 HST deadlines

The implementation of the Harmonized Sales Tax is looming and how it will affect homebuyers depends on specific dates.
After July 1, 2010, consumers begin paying the HST, a 13% blended tax comprising 5% GST and 8% PST on the majority of goods and services throughout Ontario.

Here is a brief summary of key facts and dates relating to home purchases:
For homebuyers of resale homes, there is no HST on the purchase price, however there will be new HST on many services required, like real estate commissions, legal fees, home inspections and so on, which have suggested will increase the average costs to purchase and sell by more than $2000 per transaction.

For buyers of newly constructed homes where homebuyers take occupancy or ownership of new residences (including condominiums) before July 1, 2010, HST does not apply.

For contracts entered into after June 18,2009 and before July 1, 2010, and occupancy and ownership occur after June 30, 2010, HST does apply.
For contracts entered into before June 19,2009, where homebuyers both close and occupy new residences (including condominiums) before or after June 30, 2010, the HST will not apply.

There is an enhanced rebate program for HST on new homes. Purchasers entitled to the GST portion of the rebate will now be entitled to a PST rebate as well.
Effectively, the PST portion of the rebate is 75% of the provincial portion of the HST on purchases up to $400,000 to a maximum of $24,000, which is the same as saying the tax increase of 8% is reduced by 6% to 2%. So on the first $400,000 there is a 2% increase ($8000) and every additional $100,000 in purchase price will see an additional non-refundable $8000 of tax.

Homebuyers should make sure the HST and the rebate will be handled by their builder in the same way as the GST rebate was previously.
Please note, however, the homebuyer may be eligible for a PST Transitional Housing Rebate when construction is started before July 1, 2010 but closing takes place later.

The PST Transitional rebate is a short-term program intended to help purchasers recover the cost of PST embedded in the purchase price. The amount of the rebate depends on how complete the home is at July 1. Buyers should make sure their builders will help them apply for the transitional rebate.
Please also note that for some mysterious reason, the PST Transitional Housing Rebate does not apply to new condominium units.
Source: Riopelle Griener http://www.rglaw.ca/ENpublications.htm