Harmony…such a smooth sounding word.  “Agreement in feeling or opinion; accord: live in harmony.“  – definition of harmony from Answers.com.  WELL NOT IN THIS CASE, don’t be fooled by pretty words, people!

Premier Dalton McGuinty and Finance Minister Dwight Duncan have been publicly discussing the possibility of merging… or in their words “harmonizing” the PST and GST.  Instead of paying 8% (PST) and 5% (GST) separately, both would become one HST (Harmonized Sales Tax). For most purchase such as shoes, phones, or even CD’s the harmonized tax will have no effect on purchasers because both tax’s are already mandatory.  BUT for many other major goods and services such as legal fees, realtor commissions and home insurance premiums both tax’s would now be charged.

Resale homes are exempt from GST and PST (except in some rare situations) but brand new homes are not.  Currently they are subject to GST and according to a study recently conducted for the Building Industry and Land Development Association (BILD), a HST could mean a tax increase on a newly constructed home in Toronto of a whopping $46,676.

Now is definilty not the time to start charging the same people who are expected to fuel this economy… HOME BUYERS!
Call, email or write your local MPP’s and tell them you oppose this tax.  I’ve already started by emailing mine.

For your reading pleasure I have included the letter below:

Honourable Michael Bryant,
MPP – St. Paul’s
99 Wellesley St. W.
Whitney Block Suite 1306,
Toronto
M7A1W2

Dear Minister Bryant
As a REALTOR® in your riding, I’m writing today to express my concern about the possible implementation of a harmonized sales tax in the province of Ontario.
As you know, the Premier has openly mused about the possibility of harmonizing the goods and services tax with the provincial sales tax and has done nothing to discourage speculation that harmonization may occur at some point in the future.

If that happens, it will have a devastating effect on the housing market, both new and resale.
I’m sure you’ve seen recent studies done by the Building Industry and Land Development Association indicating that harmonization would add tens of thousands of dollars to the cost of new housing in Ontario. But harmonization would also have a dramatic negative effect on the resale housing market as well.

For example, harmonization would result in provincial sales tax being applied to legal fees, appraisal fees, real estate commissions, moving expenses, home staging services, landscaping and more services usually associated with real estate transactions. In addition, harmonization would result in the goods and services tax being applied to items such as mortgage insurance premiums and title
insurance fees.

As you know, the real estate market has been hit hard by the current recession with unit sales dropping 25-50% in many parts of the province. Now is surely not the time to impose new taxes on the real estate sector when we need economic stimulus to grow the Ontario economy. Please tell Premier McGuinty and Finance Minister Duncan that harmonization is bad for the housing market, bad for the Ontario economy and bad for consumers wishing to buy and sell homes in Ontario.

Yours truly,
Mark Savel

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