The Ontario Harmonized Sales Tax (HST)

This new tax proposed by the Canadian Government will combine the 8% Ontario sales tax and the 5% GST into a single 13% value-added sales tax that would be federally administered, starting July 1, 2010. 

A common question regarding home selling that we are being asked is:

I want to sell my house that I currently live in. If the closing date for the sale of my house is after June 2010, would the sale of the house be exempt under the HST?

Yes. The sale of a house that has been previously (or currently) occupied by an individual is exempt from GST, and after Julne 2010, would also be exempt for purposes of the HST. This we also refer to as a “resale home” (as opposed to a brand new builder home, where HST does come into affect).

Like many services, however, that are currently taxed at 5% (GST), many of those same services will be taxed at the new 13% (HST) amount come July 2010. Things like lawyer fees, Home Inspection costs, and most notably commission paid to Real Estate companies for the listing and selling of a property. For example:

Typical Real Estate commission paid on the sale of a $200,000 home is $10,000 + GST ($500). So the total commission amount would be $10,500. After July 2010, for the sale of the same property (sale price of $200,000) the commission paid would be $10,000 + HST ($1,300), total of $11,300. An increase of $800.

The HST is expected to benefit the Ontario construction industry, as well as many Ontario businesses. There will be, however, some tax benefits for consumers also!

Rebates and Exemptions

The HST will not be charged on the following items that are currently not subject to PST:

  • Basic groceries
  • Prescription drugs
  • Certain medical devices
  • Child care
  • Residential rents
  • Municipal public transit
  • Most health and education services
  • Legal aid
  • Most financial services
  • Tutoring
  • Music lessons

Consumers will not have to pay the provincial portion of the HST for:

  • Qualifying prepared food and beverages sold for $4.00 or less
  • Print newspapers
  • Children's clothing and footwear
  • Children's car seats and car booster seats
  • Diapers
  • Feminine hygiene products
  • Books (including audio books)

If you have further questions about the upcoming HST, and how it might affect you in your particular case, please leave a comment here or send Teresa or myself a personal email.


Flav Onsen
Sales Representative
Royal LePage Wolle Realty