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Home buyers wrongly believe HST applies to resales: survey

OTTAWA — Real estate agents in Ontario fear their business is being hurt largely by the misguided belief a new sales tax applies to previously owned homes.
A survey done by Ipsos Reid, commissioned by the Ontario Real Estate Association, shows 56 per cent of people in Ontario think the harmonized sales tax, implemented in July, applies to the cost of a resale home.

Ontario and British Columbia both implemented HSTs at the same time.
For many goods, it simply combines the provincial and federal rates of sales tax. But for many other products and services, it added a sales tax where none previously existed.

OREA points out that with an average resale home price of $333,000 in Ontario, most residents wrongly expect to pay another $40,000 in sales tax if they were to buy a home of that value. But the HST is only levied on the various transaction fees associated with the purchase of a home that has been previously occupied.

"Clearly, Ontarians still don't know what the HST covers and what is exempt," said OREA president Dorothy Mason. "This is not helping the housing market, and it's not helping the Ontario economy. This confusion means that many buyers think the cost of a resale home is tens of thousands of dollars higher than it actually is."

"We're doing our part to inform our clients, but we shouldn't have to do it alone. We're calling on the Ontario government to launch an immediate public awareness campaign to educate taxpayers and end the HST confusion."

The survey was taken of 830 Ontario residents between Oct. 4 and 11.

The results are considered representative of the population within 3.8 percentage points, 19 times of 20.

The new HST in Ontario and British Columbia has been widely cited by real estate professionals and analysts for contributing to a slowdown in housing sales, along with tighter mortgage regulations and expectations — which have since dampened — that interest rates were on the verge of a sharp turn upward.

Source Postmedia News
By Derek Abma

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Ottawa housing sales near average in September

Members of the Ottawa Real Estate Board sold 1,074 residential properties in September through the Board’s Multiple Listing Service® system compared with 1,218 in September 2009, a decrease of 11.8 per cent.
Of those sales, 240 were in the condominium property class, while 834 were in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, stacked etc.) which is registered as a condominium, as well as properties which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.
“After record-breaking sales in September of 2009, this year’s sales were closer to the five-year average for this time of year. Home prices continued to appreciate but not skyrocket, as they generally do in Ottawa. I would describe the current state of the housing market in our region as balanced, with a good supply of homes available for sale,” said Immediate Past President Rick Snell.
The average sale price of residential properties, including condominiums, sold in September in the Ottawa area was $324,745, an increase of 6.6 per cent over September 2009. The average sale price for a condominium-class property was $240,050, a decrease of 0.8 per cent over September 2009. The average sale price of a residential-class property was $349,117, an increase of 8.2 per cent over September 2009.

Source Ottawa Real Estate Board Oct 2010