Contributing Lawyers


Cyndee Todgham Cherniak

United States

Susan Kohn Ross


Andrew Hudson

Harmonization in Ontario of GST and ORST Does Not Include Decrease in Land Transfer Tax

After July 1, 2010 and harmonization, sales of new homes in the province of Ontario will be subject to harmonized sales tax ("HST") at a rate of 13%. In addition, the sale will be subject to land transfer tax imposed by the province of Ontario. If the property is located in Toronto, the transfer of the new home will also be subject to Toronto land transfer tax. The province of Ontario does not currently intend to offer land transfer tax relief if the property is subject to HST.

In other words, this is a tax grab - because transfers of real property is not subject to Ontario retail sales tax.

While there is some tax relief for new homes with a fair market value of less than $400,000. However, the aren't many new homes constructed in the city of Toronto that are valued at less than $400,00 these days. Even really small homes (less than 1000 square feet) cost more than $400,000. Other major cities will face similar issues.

This is a problem with Ontario's harmonization plans. I am an adjunct law professor at Case Western Reserve University School of law and see so many students graduate with huge debts. Even those which are able to secure employment spend years paying off their education related debts. Now, when Ontario's young and promising will have to pay off their debts and then save in order to afford the sales taxes they must pay on their first home.


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