Ontario Budget - $1000 cash & Harmonized tax

[Ninster]

Major info came out in the last couple of hours

http://www.torontosun.com/news/canada/2009/03/25/8885321.html

- $1000 cash to all families with total income under 160K
- Harmonized sales tax with some excemptions
The 8% PST will not be added to: children’s clothing and shoes, books, feminine hygiene products, child car seats, diapers and new homes under $400,000.

Sucks if you were looking at buying a new house over 400K (will be extra 8% now)

[groo]

I'm worried that I'm going to have to pay 8% now on my new house that's closing in May. When is this supposed to go into affect? Since I "bought" the house last year, does this still not apply to me, or does the fact that I don't close until May mean that I have to pay? :(

[urban1]

Wow. $1000 cash. Who is going to pay for this?
I cant find too many details yet. People thought Alberta was crazy for giving out $400 to each resident during the boom times. This $1000 per family is going to end up costing much more per tax payer after years of interest payments by the government.

[Bullseye]

Wow. $1000 cash. Who is going to pay for this?
I cant find too many details yet. People thought Alberta was crazy for giving out $400 to each resident during the boom times. This $1000 per family is going to end up costing much more per tax payer after years of interest payments by the government.

Of course, you and I will pay for it, in the end.

Even if most people spend the money, they'll likely spend it on electronics made in China, a vacation somewhere warm, or something else where most of the money leaves the province. Can't see how this will stimulate Ontario much.

Seems like it would have been smarter to give a rebate on Ontario built auto's, or something similar.

[Ninster]

$1000 may not cover all the increases most families will see.
All of the following will go up 8%

Newspapers;
Magazines under subscription;
Restaurant meals costing $4 or less including cups of coffee and tea;
Taxi, bus, airplane and train fares;
Gasoline, diesel fuel and propane;
Residential electricity, natural gas and firewood;
Campground site fees;
Home Internet services;
Certain residential Energy Star appliances;
Vitamins;
Gym and fitness memberships;
Bicycles (and related safety equipment) costing less than $1,000;
Accounting and legal services;
Certain financial services fees;
Construction labour including home building and renovation labour;
Dry cleaning and laundering services;
Car towing services;
Grass cutting and snow removal services; and
Real Christmas trees purchased in December

[gman]

$1000 may not cover all the increases most families will see.
All of the following will go up 8%

Newspapers;
Magazines under subscription;
Restaurant meals costing $4 or less including cups of coffee and tea;
Taxi, bus, airplane and train fares;
Gasoline, diesel fuel and propane;
Residential electricity, natural gas and firewood;
Campground site fees;
Home Internet services;
Certain residential Energy Star appliances;
Vitamins;
Gym and fitness memberships;
Bicycles (and related safety equipment) costing less than $1,000;
Accounting and legal services;
Certain financial services fees;
Construction labour including home building and renovation labour;
Dry cleaning and laundering services;
Car towing services;
Grass cutting and snow removal services; and
Real Christmas trees purchased in December

Yes, if your family pay $12500 per year for the stuff above, you lose.

[dutchca]

$1000 bribe for getting the HST implemented - try again.

This tax will cost the average consumer thousands and thousands over the years. Thing is, it will cost the "rich" more as they typically consumer more goods - and they won't even be getting the bribe money.

Liberals are out come next election, based on this hair-brain scheme with the HST.

Just what small busineses need - to worry about new tax legislation/invoicing/computer program updates when many are struggling to survive on significantly lower sales.

Bllaaahhhh..puke!

[dutchca]

Yes, if your family pay $12500 per year for the stuff above, you lose.

Yeah, $12500 in one year you lose $1000, but what about over the course of a lifetime? That's many thousands over.....

[krazo]

Guess I better move up my order of supplements so I don't get hit by the increase :(

[gman]

Yeah, $12500 in one year you lose $1000, but what about over the course of a lifetime? That's many thousands over.....

Damn! I thought it is $1000 per year.

[VivienM]

Newspapers;
Magazines under subscription;
Restaurant meals costing $4 or less including cups of coffee and tea;
Taxi, bus, airplane and train fares;
Gasoline, diesel fuel and propane;
Residential electricity, natural gas and firewood;
Campground site fees;
Home Internet services;
Certain residential Energy Star appliances;
Vitamins;
Gym and fitness memberships;
Bicycles (and related safety equipment) costing less than $1,000;
Accounting and legal services;
Certain financial services fees;
Construction labour including home building and renovation labour;
Dry cleaning and laundering services;
Car towing services;
Grass cutting and snow removal services; and
Real Christmas trees purchased in December

Hold on a sec. Since when is there is no PST on home internet?

[rdtx2002]

$1000 bribe for getting the HST implemented - try again.

This tax will cost the average consumer thousands and thousands over the years. Thing is, it will cost the "rich" more as they typically consumer more goods - and they won't even be getting the bribe money.

Liberals are out come next election, based on this hair-brain scheme with the HST.

Just what small busineses need - to worry about new tax legislation/invoicing/computer program updates when many are struggling to survive on significantly lower sales.

Bllaaahhhh..puke!

Weren't the Liberals suppose to be out before this term?

[dutchca]

Damn! I thought it is $1000 per year.

I don't think so - but we willl see tomorrow.....

[new_vr]

Of course, you and I will pay for it, in the end.

Even if most people spend the money, they'll likely spend it on electronics made in China, a vacation somewhere warm, or something else where most of the money leaves the province. Can't see how this will stimulate Ontario much.


So true. We will either spend it on a vacation, or pay off the mortgage. Neither will have an impact on the economy here

[EugW]

Major info came out in the last couple of hours

http://www.torontosun.com/news/canada/2009/03/25/8885321.html

- $1000 cash to all families with total income under 160K
- Harmonized sales tax with some excemptions
The 8% PST will not be added to: children’s clothing and shoes, books, feminine hygiene products, child car seats, diapers and new homes under $400,000.

Sucks if you were looking at buying a new house over 400K (will be extra 8% now)“This will further stymy the economy and it’s just a wrong move at the wrong time,” Tory MPP Joyce Savoline said, noting the tax burden on a $400,000 new home would rise by $32,000.
Hmmm... Did she really say a $400000 new house would have a tax burden increase of $32000? If so I guess she missed the memo.

That said, in Toronto, $400000 is at the lower end for houses (not including condos). Do you really need to be taxed another $28000 on a $750000 home? That's what an upscale semi-detached costs in central Toronto. A nice detached in central Toronto might cost a million, which would mean another tax burden of nearly $50000. Ouch.

So, in Toronto, a new $1000000 house:

Provincial land transfer tax: $16475
Ontario land transfer tax: $15725
GST portion of HST: $50000
PST portion of HST over $400000: $48000

Yay, only $130000 in tax.

For a $600000 house:

Provincial land transfer tax: $8475
Ontario land transfer tax: $7725
GST portion of HST: $30000
PST portion of HST over $400000: $16000

Total: $62200 in tax.

Please tell me this is just some sick joke.

[gman]

Hmmm... Did she really say a $400000 new house would have a tax burden increase of $32000? If so I guess she missed the memo.

That said, in Toronto, $400000 is at the lower end for houses (not including condos). Do you really need to be taxed another $28000 on a $750000 home? That's what an upscale semi-detached costs in central Toronto. A nice detached in central Toronto might cost a million, which would mean another tax burden of nearly $50000. Ouch.

So, in Toronto, a new $1000000 house:

Provincial land transfer tax: $16475
Ontario land transfer tax: $15725
GST portion of HST: $50000
PST portion of HST over $400000: $48000

Yay, only $130000 in tax.

For a $600000 house:

Provincial land transfer tax: $8475
Ontario land transfer tax: $7725
GST portion of HST: $30000
PST portion of HST over $400000: $16000

Total: $62200 in tax.

Please tell me this is just some sick joke.

Who said it is about Toronto? Joyce Savoline is the MPP of Burlington. Forget about the tax, how many family in Ontario can afford a $600K to a million dollar house?

[EugW]

Who said it is about Toronto? Joyce Savoline is the MPP of Burlington.
She said that new houses costing $400000 would see an additional tax burden of $32000... except that rumour has it that new houses up to $400000 are specifically exempted. ie. The additional tax burden would be exactly $0 for $400000 new houses, anywhere in Ontario.

That said, they could have just misquoted her.


Who said it is about Toronto? Joyce Savoline is the MPP of Burlington. Forget about the tax, how many family in Ontario can afford a $600K to a million dollar house?
Tons... but the numbers will decrease as the taxes increase.

[Dragonrana]

this is absolutely ridiculous! So, basically they are bribing every Ontarian with their own money of 1000 bux?? Does Mcgenius think we're all dumb idiots here? A 1000 dollars per household with combined income of less than 160,000? where did he come up with this?
...and 8% tax on houses 400,000 and over? Why 400K and not 300K or 500K? He's basically screwing with many Ontarians who may have saved up over the years to buy their first house. I mean ppl who are buying north of the city and in the downtown core should be furious about this. Is he forcing every middle income earner in ontario to be near the poverty line?

Geez, maybe McGuinty should think of slashing services and large spending first? I mean if you're in debt, your spending habit changes and you don't buy more. This stimulus spending is getting way out of hand. All i have to say is stop spending, and let the recession run its damn course!!:mad: Canada was already due for a recession anyways.

[ancodia]

so how does this work for signed contracts? Example, I sign an agreement with an real estate agent two weeks ago for 4%+gst. Lets say after tomorrow the tax rate changes to 13% does this also affect the agreement I made prior to the change? Since the new tax rate will be in effect when I actually pay the agent will I be forced to pay the new rate? Better not be. If so, is that legal as I entered into a deal expecting to incur a certain expense, can it change?

If not, should we all be spending our morning finalizing agreements under the old tax rate? :)

[gman]

Tons... but the numbers will decrease as the taxes increase.

Are you saying there are more houses that are above $600K than the $400K and lower houses in Ontario?

[EugW]

Are you saying there are more houses that are above $600K than the $400K and lower houses in Ontario?
How could you possibly come up with that conclusion from my statement? :confused: I said nothing of the sort.

All I said is that there were tons of families who can afford $600000+ houses in Toronto, and that's absolutely true. Some neighbourhoods around here can average even over $1 million per house, and they are definitely not ubermansions. Remember, just a nice semi-detached in central Toronto will go for $600000+, and this is after the 2009 price drops.

Given that the absolute number of homes in Toronto is high, the absolute number of $600000+ homes is also relatively high. However, such a tax definitely puts a disincentive on building new homes... something the home builders definitely don't need in a market which is already down.

We shall see if this craziness is true though tomorrow.

[budfrogs]

Contract employees will go up 8% too if they charge GST? (ie bill more then $30,000 a year) Although, I think most businesses get this back?

How much is this going to cost businesses to change their computer systems, POS's, forms, contracts, databases and so on?

Harper changing the GST in small chunks meant that they have already had to change their system a couple of times in recent times!

This seems like a stupid idea! Especially at this point when lots of places are just trying to survive.

Tim Hortons is where most people are going to see it! Large Double Double will go up by 12c ish!

What is this going to do for cross provincial mail-order? Right now NCIX orders to Ontario do not pay PST. Will they need to pay harmonized seeing as it is federal? How about orders going from Ontario to another province?

[rapsrealm]

So who gets the $1000? Is it every working household member or is it just the homeowner?

[rdtx2002]

So who gets the $1000? Is it every working household member or is it just the homeowner?

Come on.. Dalton might be a douche.. but he ain't stupid.

[budfrogs]

So who gets the $1000? Is it every working household member or is it just the homeowner?

I heard every family! Why should it just be homeowners? They do not pay any extra sales tax with this if they already own their home.

Does this mean income tax GST cheques will become twice as large also for those who qualify?

[brunes]

This handing out $1000 cash to every working person in Ont. has to be the dumbest thing I have ever heard. Ontario has 13 million people. I will guesstimate the number of people who should receive this $1000 at maybe 50% of that - so 7 million people. That is 7 billion dollars being handed out. You know what Ontario could do with 7 billion dollars, the infrastructure it could build (that would directly employ people)?

[EugW]

What is this going to do for cross provincial mail-order? Right now NCIX orders to Ontario do not pay PST. Will they need to pay harmonized seeing as it is federal? How about orders going from Ontario to another province?
Interesting question. Can Maritimers chime in?

My guess is that out of province orders to Ontario will charge GST only.
However, orders from Ontario heading elsewhere will charge HST, which means most people would prefer not to order from Ontario.

[brunes]

Interesting question. Can Maritimers chime in?

My guess is that out of province orders to Ontario will charge GST only.
However, orders from Ontario heading elsewhere will charge HST, which means most people would prefer not to order from Ontario.

If it follows the same rules as us, you will be charged full HST on all mail orders COMING INTO Ontario (at least you are supposed to - some out-of-province companies don't know any better though and only charge GST). Companies who operate *IN* Ontario, will only charge HST if the person ordering the item live sin an HST province, just like they do today.

For example - if I opened up a web business, if someone from NB or NS orders something today, I have to charge HST. If someone from BC orders, I charge GST only. The fact that the company exists in NB, has nothing to do with anything.

[mart242]

this is absolutely ridiculous! So, basically they are bribing every Ontarian with their own money of 1000 bux?? Does Mcgenius think we're all dumb idiots here?

Not all dumb idiots.. but there's a lot of them and they don't complain.

[gman]

So who gets the $1000? Is it every working household member or is it just the homeowner?

This handing out $1000 cash to every working person in Ont. has to be the dumbest thing I have ever heard. Ontario has 13 million people. I will guesstimate the number of people who should receive this $1000 at maybe 50% of that - so 7 million people. That is 7 billion dollars being handed out. You know what Ontario could do with 7 billion dollars, the infrastructure it could build (that would directly employ people)?

To every family which has household income less than $160K.

[Coolin]

Looks like NCIX will suddenly lose a lot of business.

[go leafs]

We don't know the details about who is getting the $1000 or even if it's happening (they could change their mind, this is just info from sources).. wait til tomorrow afternoon.

[knoc10]

okay so i'm 23, live out of province for school and technically still living with my parents. They earn more than $160,000. Am I exempt?

[go leafs]

okay so i'm 23, live out of province for school and technically still living with my parents. They earn more than $160,000. Am I exempt?

Wait til tomorrow. anyone answering right now is just speculating.

[EugW]

If it follows the same rules as us, you will be charged full HST on all mail orders COMING INTO Ontario (at least you are supposed to - some out-of-province companies don't know any better though and only charge GST). Companies who operate *IN* Ontario, will only charge HST if the person ordering the item live sin an HST province, just like they do today.

For example - if I opened up a web business, if someone from NB or NS orders something today, I have to charge HST. If someone from BC orders, I charge GST only. The fact that the company exists in NB, has nothing to do with anything.
OK that makes sense, but...

I was told by companies outside of Ontario that they are not obliged to charge Ontario PST. The PST should be paid, but there is no mechanism in place to collect that PST, and it's not actually their responsibility to ensure that the PST is paid.

I dunno, maybe that is totally wrong, but I have NEVER paid Ontario PST on ANY order from outside Ontario (but from within Canada). That's why I would have expected those companies to simply charge GST.

[elty]

Interesting question. Can Maritimers chime in?

My guess is that out of province orders to Ontario will charge GST only.
However, orders from Ontario heading elsewhere will charge HST, which means most people would prefer not to order from Ontario.

The other way around.

[albatman]

Contract employees will go up 8% too if they charge GST? (ie bill more then $30,000 a year) Although, I think most businesses get this back?


Bingo!
I run a service business which charges GST, I have contracts with existing clients, now I either have to ask my clients to shell out an extra 8%, risking to lose them, or swallow the increase effectively increasing the business tax we have to pay by 8%.
So how is this good for business Mr. Premier?

[gman]

OK that makes sense, but...

I was told by companies outside of Ontario that they are not obliged to charge Ontario PST. The PST should be paid, but there is no mechanism in place to collect that PST, and it's not actually their responsibility to ensure that the PST is paid.

I dunno, maybe that is totally wrong, but I have NEVER paid Ontario PST on ANY order from outside Ontario (but from within Canada). That's why I would have expected those companies to simply charge GST.

A company that only operates within a province only deals with its provincial government and federal in terms of reporting sales tax. They don't deal with other provincial governments.

They (a company in BC) do not and cannot charge you Ontario PST. You are supposed to pay PST to Ontario government yourself.

However, if Ontario is using HST, the company in BC will charge you HST because they are reporting this sale tax to Federal (not Ontario).

If you live in BC and want to order stuff from a company operates in Ontario, that company will charge you 5% GST only (even after Ontario has HST).

[knoc10]

okay so i'm 23, live out of province for school and technically still living with my parents. They earn more than $160,000. Am I exempt?

[EugW]

A company that only operates within a province only deals with its provincial government and federal in terms of reporting sales tax. They don't deal with other provincial governments.

They (a company in BC) do not and cannot charge you Ontario PST. You are supposed to pay PST to Ontario government yourself.

However, if Ontario is using HST, the company in BC will charge you HST because they are reporting this sale tax to Federal (not Ontario).
OK. That makes more sense... and sucks. :(

Actually, that in itself doesn't bother me much. It's everything else, including the horrendous taxation that seems to have been added to new home builds.

[showmethemoney2009]

Not all dumb idiots.. but there's a lot of them and they don't complain.


On the contrary, I think in this case, the public is quite informed and McSocialist's BS will not fly. We'll see tomorrow @4pm as more details emerges.

[budfrogs]

Bingo!
I run a service business which charges GST, I have contracts with existing clients, now I either have to ask my clients to shell out an extra 8%, risking to lose them, or swallow the increase effectively increasing the business tax we have to pay by 8%.
So how is this good for business Mr. Premier?

I think there are a LOT of contracts that are going to have to be rewritten!

I think my old company got back $1 paid for $1 on GST because GST is only suppose to be on finish/consumer products. IE you are not suppose to pay GST on a material that will be used to make something else to sell. I do not believe Ontario PST is like this, I think it is a business expense like any other spending.

Which way is Ontario HST going to work? How does maritime's work?

[EugW]

On the contrary, I think in this case, the public is quite informed and McSocialist's BS will not fly. We'll see tomorrow @4pm as more details emerges.
Actually, I think they timed this well for themselves. Right now the Conservative Party in Ontario is in shambles, so it would be much harder for them to mount an effective campaign against the harmonization. Furthermore, the Liberals have a majority government, and still have a couple more years before their term is up.

However, some questions:

1. Assuming the HST harmonization does pass, how hard would it be to unharmonize it?
2. Is it possible to have HST exempt items, yet still charge GST? That sounds to me rather complicated, and likely a no.

If a less spendy government were to come in after HST harmonization, my guess is the simplest thing to do would be to keep it, but reduce the rate. Is that correct?

EDIT:

With regards to #2, the claim by the report is that $400000 new homes would be exempt. Would that mean they exempt all HST so not even the GST is charged? I find it hard to believe that the federal gov't would make that concession. That could make things more palatable, but I'm not counting on it.

[albatman]

I think there are a LOT of contracts that are going to have to be rewritten!

I think my old company got back $1 paid for $1 on GST because GST is only suppose to be on finish/consumer products. IE you are not suppose to pay GST on a material that will be used to make something else to sell. I do not believe Ontario PST is like this, I think it is a business expense like any other spending.

Which way is Ontario HST going to work? How does maritime's work?

Not quite. Service industry, like construction, plumbers, computer consultants, lawyers, accountants, financial services etc. don't pay much in the way of PST, their expenses are mostly in salaries paid to employees. So charging HST is basically a tax grab from either the businesses or their clients.
Business are already hit with bad economy. If the business was to take the 8% hit, it would most definitely pass it to employees in the way of salary cuts or layoffs.

[budfrogs]

Isn't Harper "planning" to continue to lower the GST? (I don't think he can lower it more right now!)

What happens if the GST is removed altogether? Does that mean Ontario's provincial sales tax still has to be put threw the federal books?

I am all for saving money in government. This should put a few civil servants out of work that collect/refund/administer/audit PST claims.

I wonder how long it will take Miller to say he wants to add 1% onto the HST for everything sold in TO! 3...2....

[RJones89]

okay so i'm 23, live out of province for school and technically still living with my parents. They earn more than $160,000. Am I exempt?

Same question here. I'm 19, live at home with parents, student, they earn more than 160k. I'm guessing they mean household as in address, so we'd both be SOL.

[bolmsted]

If I'm reading this properly, it will be a one time payment of $1000 and not year over year :(


The government also proposes to help consumers adjust to the new regime by providing one-time compensation of $1,000 – in three equal payments over 12 months – to families with annual incomes of less than $160,000.

http://www.theglobeandmail.com/servlet/story/RTGAM.20090325.wPOLontbudget0325/BNStory/politics/home

[bolmsted]

Isn't Harper "planning" to continue to lower the GST? (I don't think he can lower it more right now!)

They only promised to drop it to 5%


What happens if the GST is removed altogether? Does that mean Ontario's provincial sales tax still has to be put threw the federal books?

Won't happen. The studies that were done show that the 1-2% drop would be minimal for most households (like $100-200 year) rather than an income tax drop because you have to spend to see tax savings.


I wonder how long it will take Miller to say he wants to add 1% onto the HST for everything sold in TO! 3...2....
I'll be first in line to take him "out" if that's the case. Miller has to go.

[konfusion666]

Given that the absolute number of homes in Toronto is high, the absolute number of $600000+ homes is also relatively high. However, such a tax definitely puts a disincentive on building new homes... something the home builders definitely don't need in a market which is already down.

yeah but "new homes" tend to be built in the suburbs, not in Toronto... right?
of course, condo's are included in the term "homes" and there are many of those being built in Toronto but I'd guess a majority of them are $400k or less...

a strictly middle-class suburb like Mississauga probably tends to have more $350-400k new homes than anything else so they are affected less. a most posh/wannabe-posh suburb like Oakville or Richmond Hill would have more expensive homes so I guess those areas are more of a turn-off now.

[EugW]

With regards to #2, the claim by the report is that $400000 new homes would be exempt. Would that mean they exempt all HST so not even the GST is charged? I find it hard to believe that the federal gov't would make that concession. That could make things more palatable, but I'm not counting on it.
According to the Globe article (http://www.theglobeandmail.com/servlet/story/RTGAM.20090325.wPOLontbudget0325/BNStory/politics/home), there would be no more GST on $400000 new homes in Ontario. If true, this would be a boost to the low end.

It still doesn't specify whether $600000 homes would get hit with a tax on $600000 or a tax on $200000. If the latter, it's not ideal, but would get less resistance.. If it's the former, it's totally unacceptable.


yeah but "new homes" tend to be built in the suburbs, not in Toronto... right?
of course, condo's are included in the term "homes" and there are many of those being built in Toronto but I'd guess a majority of them are $400k or less...

a strictly middle-class suburb like Mississauga probably tends to have more $350-400k new homes than anything else so they are affected less. a most posh/wannabe-posh suburb like Oakville or Richmond Hill would have more expensive homes so I guess those areas are more of a turn-off now.
Richmond Hill is posh? That's the first time I've heard that. I guess it all a matter of perspective.

Anyways, to answer your first question, it seems Toronto is selling off land for new housing developments. Many will fall into the under $400000 category, but some won't.

Also, any tear down and rebuild using a new foundation qualifies as a new home. There are lots of areas with existing wartime bungalows that are being torn down completely, and nice new 2-story homes are being built in their place. Ideally a new foundation is built, but some keep most of the old foundation to avoid extra taxes. Presumably that would still apply with the HST, but who knows.

[budfrogs]

What makes me mad is that of all the things they could have done to help the economy, businesses, families, individuals, banking system, environment this was the last thing I expected!

It is like the fark headline cliche "Having solved all other problems some government somewhere focuses on something stupid!"

Having solved all other problems the Ontario government screws everyone!
Having solved all other problems the Ontario government screws the really rich! (when buying a house and getting the $1,000)
Having solved all other problems the Ontario government raises the price on coffee!

[konfusion666]

Richmond Hill is posh? That's the first time I've heard that. I guess it all a matter of perspective.

Anyways, to answer your first question, it seems Toronto is selling off land for new housing developments. Many will fall into the under $400000 category, but some won't.

Also, any tear down and rebuild using a new foundation qualifies as a new home. There are lots of areas with existing wartime bungalows that are being torn down completely, and nice new 2-story homes are being built in their place. Ideally a new foundation is built, but some keep most of the old foundation to avoid extra taxes. Presumably that would still apply with the HST, but who knows.

Yes, it's all quite confusing. Especially if the tax regimes differ depending on "new home" vs. "resale home". I'm definitely not getting into the housing market this year.

BTW I meant that Richmond Hill is posh compared to Mississauga. 'Sauga has become a bit of a working-class suburb.

Also, let's look at the $1000 cheque for a second (I need a new computer to play Diablo 3...). What is "household" defined as and how would they handle who is getting the cheque? What did Alberta do with their $400 thing?

[EugW]

Yes, it's all quite confusing. Especially if the tax regimes differ depending on "new home" vs. "resale home". I'm definitely not getting into the housing market this year.

BTW I meant that Richmond Hill is posh compared to Mississauga. 'Sauga has become a bit of a working-class suburb.
Heh. Ironically, the people I know in Mississauga live in more expensive homes than the people I know who live in Richmond Hill. Just the luck of the draw I guess.

I doubt this tax would have any effect on a resale homes directly. ie. Resale homes currently do not get charged GST or PST, so I presume they wouldn't get charged HST either. If they did start to charge HST on resale homes, the masses would revolt.

However, I do think anything that will drive down sale prices of one component of the market (new home builds) will partially drag down the entire market just through osmosis to a certain extent.

This is bad enough for Ontario in general since there is also the provincial land transfer tax, but it's especially bad in Toronto because of the additional Toronto land transfer tax which is almost as big as the provincial one.

[83_gemini]

The HST is ultimately a tax cut for business (i.e. ultimately lower prices, increased job growth etc.) and a shift in the tax burden towards consumption (which is considered economically beneficial), given the way the PST is currently structured. The HST then, is clearly good policy. But it is bad politics because the savings and efficiencies are rather diffuse while the cost (the stuff exempted from PST is now covered by PST) is visible and concentrated, even though the ultimate result is a lower tax burden (or at least the burden is unchanged--the goal AFAIK, is revenue neutrality).

[setell]

Same question here. I'm 19, live at home with parents, student, they earn more than 160k. I'm guessing they mean household as in address, so we'd both be SOL.

I think you'll get the $1000 since you're no longer their dependant. I think if you get a GST cheque you should qualify as those are 1 per household/family.

[onlineharvest]

I'm worried that I'm going to have to pay 8% now on my new house that's closing in May. When is this supposed to go into affect? Since I "bought" the house last year, does this still not apply to me, or does the fact that I don't close until May mean that I have to pay? :(

You entered into the purchase agreement before (assuming this happens) a harmonized tax takes affect. You don't have to worry. Plus, I thought I read it would take some time to come into affect should it happen.

[EugW]

The HST is ultimately a tax cut for business (i.e. ultimately lower prices, increased job growth etc.) and a shift in the tax burden towards consumption (which is considered economically beneficial), given the way the PST is currently structured. The HST then, is clearly good policy. But it is bad politics because the savings and efficiencies are rather diffuse while the cost (the stuff exempted from PST is now covered by PST) is visible and concentrated, even though the ultimate result is a lower tax burden (or at least the burden is unchanged--the goal AFAIK, is revenue neutrality).
A harmonized tax per se is not necessarily a bad thing, if implemented responsibly.

The latter part is what has everyone steaming. I wouldn't be surprised if this ends up be a tax grab for Ontario. However, even revenue neutrality is potentially a bad thing IMO in this economic climate. Efficiencies in government spending both at the provincial and municipal level need to be pursued, but that isn't really happening, at least in my municipality.

[onlineharvest]

A harmonized tax per se is not necessarily a bad thing, if implemented responsibly.


LOL! That condition pretty much never seems to be upheld.:razz:

Let's face it. We have good reason to be critical of any government trying to tax its citizens even more when we are already taxed enough.

[VivienM]

The HST is ultimately a tax cut for business (i.e. ultimately lower prices, increased job growth etc.) and a shift in the tax burden towards consumption (which is considered economically beneficial), given the way the PST is currently structured. The HST then, is clearly good policy.

That assumes you buy the theory that growth is a function of investment, where investment = savings. Yes, I am aware that said theory is taught in every economics course (I even have the economics degree to prove I managed to reproduce it on several exams!)...

If you ask me, this crisis, which seems to have been started by a savings glut originating from Asian countries that wound up fuelling asset bubbles according to some people (whom I think are right), will hopefully be the end of the Solow model and consumption taxes and other such nonsense.

And yes, I am well aware that Solow got a Nobel prize, but nobody ever explained to me ONE thing: even if you have lots of cheap capital, if you have a world of savers (imagine no income tax, but a 30-50% consumption tax, like many economics with their fancy models want), who is going to buy the stuff that your brand new factories built with your cheap capital produce?
The Asian tigers found the answer: put your stuff on boats, sell it to Americans, and stockpile American money by playing games with your exchange rate (something many economics models ignore). Then lend that American money back to American consumers, who'll buy more stuff from your factories. The factories generate jobs for your population, which is now able to increase their consumption and their standard of living. Repeat for a couple of decades... and you have impressive annual GDP growth rates. But anybody who fails to notice that this growth was export-driven, and who just points to those countries' high savings rates, is ignoring the key factor.

But if you can't freeload on another country's low-savings, high-spending consumers... then what? Who is going to take advantage of cheap capital and invest in businesses that make stuff for which demand is low/uncertain?

[VivienM]

The latter part is what has everyone steaming. I wouldn't be surprised if this ends up be a tax grab for Ontario. However, even revenue neutrality is potentially a bad thing IMO in this economic climate.

Revenue neutrality??????

If this thing was intended to be revenue neutral, surely they'd have to lower the rate (since they're widening the tax base)?

There's no proposal to do that, AFAIK. This is a pure cash grab...

[Psycho44]

Hold on a sec. Since when is there is no PST on home internet?

I just paid the 1-year up front fee for Acanac so I won't have to pay this PST this year. Going to put all $1000 towards my mortgage. That should cut down any future interests.

[BornRuff]

Thing is, it will cost the "rich" more as they typically consumer more goods - and they won't even be getting the bribe money.


This is not true really true. Consumption taxes are generally a larger burden on the poor. The rich typically consume a smaller portion of their income in their province. They are the ones who can save money, and they are the ones who can afford to travel and spend money around the world.

Poorer people have to spend a much larger portion of their income on daily expenses in their community.

So while rich people will most likely pay more sales tax overall, they will likely be paying a much smaller protion of their income in sales tax, so it will be much less of a burden for them.

[fantom]

Yay!

Now I get to charge 8% more on my invoices as a contractor... well, **** 'em! Someone always wins, and someone always loses, and I don't like losing ;)

[belowzeros]

However, orders from Ontario heading elsewhere will charge HST, which means most people would prefer not to order from Ontario.


I never thought about that part of the equation...that is very entirely true and quite a hit to many online businesses in Ontario.

Politicians will probably snuff their noses at that little fact anyway. They already loathe the fact that out of province sales evade that tax.

[go leafs]

Revenue neutrality??????

If this thing was intended to be revenue neutral, surely they'd have to lower the rate (since they're widening the tax base)?

There's no proposal to do that, AFAIK. This is a pure cash grab...

Everything I've read has said that provincial revenues will go down

[korin]

She said that new houses costing $400000 would see an additional tax burden of $32000... except that rumour has it that new houses up to $400000 are specifically exempted. ie. The additional tax burden would be exactly $0 for $400000 new houses, anywhere in Ontario.

That said, they could have just misquoted her.



Tons... but the numbers will decrease as the taxes increase.

My understanding is that the Home builder won't have to pay the tax any more so it should be ~4% less (8% on material, usually 50% labour). So a house costing 400k now, should cost 386K. At least in theory. My issue is what happens in 10 years were the inflation pushes house prices up to say double now, most houses will be over 400k (average is ~280K in the province I believe). Are they going to increase the 400k exemption every couple of years or do the same as prepared foods $4 or less....

[brunes]

OK that makes sense, but...

I was told by companies outside of Ontario that they are not obliged to charge Ontario PST. The PST should be paid, but there is no mechanism in place to collect that PST, and it's not actually their responsibility to ensure that the PST is paid.

I dunno, maybe that is totally wrong, but I have NEVER paid Ontario PST on ANY order from outside Ontario (but from within Canada). That's why I would have expected those companies to simply charge GST.

The thing is, those companies are wrong, and it is actually their fault that they are not in compliance. My mother works in the business window of the CRA and I asked her this specific question years ago in regards to NCIX - she said they were actually breaking the law.

This is the thing I think a lot of people are so misinformed about - once the province blends the tax, *the province does not collect it anymore at all* - the CRA does. The tax becomes a federal responsibility, with federal jurisdiction. This is why if you are a web company selling something to someone in an HST province, you are supposed to charge them HST - because it has replaced the GST for them.

This is why the Atlantic provinces (and now Ontario) liked the idea so much - they got to eliminate that huge cost burden of collecting and administering that tax. And the feds were collecting GST anyway, so really it doesn't cost them anything extra hardly at all. And companies love it since now they just have one government to pay and one set of books to keep.

[Tdotshopper]

Yay!

Now I get to charge 8% more on my invoices as a contractor... well, **** 'em! Someone always wins, and someone always loses, and I don't like losing ;)

^^ you may still lose, because if your clients have to shell out additional money, they will most likely look elsewhere for 'your' type of services.. which means your out a client and out of business.

[VivienM]

This is why the Atlantic provinces (and now Ontario) liked the idea so much - they got to eliminate that huge cost burden of collecting and administering that tax. And the feds were collecting GST anyway, so really it doesn't cost them anything extra hardly at all. And companies love it since now they just have one government to pay and one set of books to keep.

And consumers/voters love it because they get screwed!

[joegrecoant]

I don't think so - but we willl see tomorrow.....

The star's article said it's $1000 PER YEAR...

http://www.thestar.com/news/ontariobudget/article/608544

Quote from star:

"Families earning less than $160,000 a year will get three cheques totalling $1,000 annually to offset the higher prices. Single people will get lesser relief."

[speedyforme]

The star's article said it's $1000 PER YEAR...

http://www.thestar.com/news/ontariobudget/article/608544

Quote from star:

"Families earning less than $160,000 a year will get three cheques totalling $1,000 annually to offset the higher prices. Single people will get lesser relief."

Why punish single people??? lol

[EugW]

The star's article said it's $1000 PER YEAR...

http://www.thestar.com/news/ontariobudget/article/608544

Quote from star:

"Families earning less than $160,000 a year will get three cheques totalling $1,000 annually to offset the higher prices. Single people will get lesser relief."
Heh. I wonder what happens if you and your spouse make $158000, and your kid on his summer job makes $3000. Rebate gets cut off completely? That would be quite annoying. :razz:

[setell]

Why punish single people??? lol

Last I know, a single person is still a family. How else will they determine who gets the GST cheques. It's one per family/household too.

[albatman]

Yay!

Now I get to charge 8% more on my invoices as a contractor... well, **** 'em! Someone always wins, and someone always loses, and I don't like losing ;)

Well you could end up losing your contracts. You are now 8% more expensive than contractors from other provinces, and the money is not even going into your pocket.

[speedyforme]

Last I know, a single person is still a family. How else will they determine who gets the GST cheques. It's one per family/household too.

I figured it would be $1k per address/household that makes less than $160k. Straight forward. Now it seems like they have to check if each address has at least 2 or more income tax filings to qualify for the $1k cheque.

[setell]

I figured it would be $1k per address/household that makes less than $160k. Straight forward. Now it seems like they have to check if each address has at least 2 or more income tax filings to qualify for the $1k cheque.

That would be stupid if they just did 1k per address and assumed it is per household. What if you live with two other roommates? Would you want to share your 1k with them? I know I wouldn't! I doubt it would be that hard for them to figure out who is single and is married etc. I'm super happy that my boyfriend and I are still single for tax purposes :D

[EugW]

So if the rumours are correct, for new home builds with an HST of 13%:

$400000 - No HST: $0 tax (vs. $20000 before) = $20000 tax savings
$600000 - HST on $200000: $26000 tax (vs $30000 before) = $4000 tax savings
$650000 - HST on $250000: $32500 tax = Same tax as before
$700000 - HST on $300000: $39000 tax (vs. $35000 before) = $4000 tax increase
$800000 - HST on $400000: $52000 tax (vs. $40000 before) = $12000 tax increase
$1000000 - HST on $600000: $78000 tax (vs. $50000 before) = $28000 tax increase
$1500000 - HST on $1100000: $143000 tax (vs. $75000 before) = $68000 tax increase
$2000000 - HST on $1600000: $208000 tax (vs. $100000 before) = $108000 tax increase

The break even point is $650000 vs. the previous GST, and this will serve to help average home builds, but this puts a serious damper on higher end home builds, and home builds in nicer neighbourhoods.

[zodieman]

So if the rumours are correct, for new home builds with an HST of 13%:

$400000 - No HST: $0 tax (vs. $20000 before) = $20000 tax savings
$600000 - HST on $200000: $26000 tax (vs $30000 before) = $4000 tax savings
$650000 - HST on $250000: $32500 tax = Same tax as before
$700000 - HST on $300000: $39000 tax (vs. $35000 before) = $4000 tax increase
$800000 - HST on $400000: $52000 tax (vs. $40000 before) = $12000 tax increase
$1000000 - HST on $600000: $78000 tax (vs. $50000 before) = $28000 tax increase
$1500000 - HST on $1100000: $143000 tax (vs. $75000 before) = $68000 tax increase
$2000000 - HST on $1600000: $208000 tax (vs. $100000 before) = $108000 tax increase

The break even point is $650000 vs. the previous GST, and this will serve to help average home builds, but this puts a serious damper on higher end home builds, and home builds in nicer neighbourhoods.


I sure hope this is true!! I'm looking at buying a new home in the next year and I'm looking at homes well under $400K.
Does anyone know if the builders will adjust pricing accordingly when this comes into play? Do we know for sure if this HST will pass?

[EugW]

I sure hope this is true!! I'm looking at buying a new home in the next year and I'm looking at homes well under $400K.
Does anyone know if the builders will adjust pricing accordingly when this comes into play? Do we know for sure if this HST will pass?
The start date is July 2010.


So if the rumours are correct, for new home builds with an HST of 13%:

$400000 - No HST: $0 tax (vs. $20000 before) = $20000 tax savings
$600000 - HST on $200000: $26000 tax (vs $30000 before) = $4000 tax savings
$650000 - HST on $250000: $32500 tax = Same tax as before
$700000 - HST on $300000: $39000 tax (vs. $35000 before) = $4000 tax increase
$800000 - HST on $400000: $52000 tax (vs. $40000 before) = $12000 tax increase
$1000000 - HST on $600000: $78000 tax (vs. $50000 before) = $28000 tax increase
$1500000 - HST on $1100000: $143000 tax (vs. $75000 before) = $68000 tax increase
$2000000 - HST on $1600000: $208000 tax (vs. $100000 before) = $108000 tax increase

The break even point is $650000 vs. the previous GST, and this will serve to help average home builds, but this puts a serious damper on higher end home builds, and home builds in nicer neighbourhoods.
Uh oh (http://www.thestar.com/news/ontariobudget/article/608544)

"Buyers of houses costing $400,000 to $500,000 would receive a partial tax credit. But new homes that cost more than that would be taxed at the full rate."

That just doesn't seem right, but if it is, then a $650000 new home would get hit with $84500 in taxes. That would represent a $52000 increase in taxes.

[QTheNukes]

This sucks, I overpaid for my house then, it was $260,000.00 tax included. It will now be $20,000.00 less? Closes in May....

The start date is July 2010.



Uh oh (http://www.thestar.com/news/ontariobudget/article/608544)

"Buyers of houses costing $400,000 to $500,000 would receive a partial tax credit. But new homes that cost more than that would be taxed at the full rate."

That just doesn't seem right, but if it is, then a $650000 new home would get hit with $84500 in taxes. That would represent a $52000 increase in taxes.

[EugW]

This sucks, I overpaid for my house then, it was $260,000.00 tax included. It will now be $20,000.00 less? Closes in May....
The GST is much, much less than $20000 for that place. What taxes are you including? Does that include land transfer tax too?

Anyways, the GST on a new home build costing say $240000 would be $12000.

I guess the one consolation for you is that if you get a mortgage, today's rates are likely lower what they will be in the second half of 2010. Home prices might rise by then too.

[mself084]

I'm trying to figure out if this means houses under 400k will be completely exempt from HST, or just the PST part of the HST? i thought it was the latter yesterday, but now im not so sure.

[EugW]

I'm trying to figure out if this means houses under 400k will be completely exempt from HST, or just the PST part of the HST? i thought it was the latter yesterday, but now im not so sure.
One newspaper report I read suggested that a concession from the federal government was to drop GST on homes under $400000.

However, we've seen inaccurate newspaper reports before. We won't know for sure until the actual announcement.

[PrinceV]

Is that 160K before of after taxes?

[mkjr]

hopefully people's memory of this will not be that short when it comes time to get rid of this liar...no tax increases, first the health tax and now this....gee thanks Dalton.

[antman59]

Too bad our Government is greedy and not smart. If they wanted to do the HST then they should look at lowring the PST to 6%. I think that would make an HST more palateable. Since everything would now be taxed I am not sure that they would lose money due to the lower rate. This would also help families with an overall lower tax rate. 11% instead of 13%.

Need to be able to do recall elections.

[Blunt]

I can't see how any can NOT be enraged about this.

This is absolutely ********!

[konfusion666]

Is that 160K before of after taxes?

probably before, thats what people usually mean when they talk about Income.

[Javeman]

What exactly is the definition of family here? My girlfriend and I own a house but we haven't lived together long enough to be classified as common-law from what I understand. So if we're still classified as single, does that mean we won't get the $1000 at all or do we have to split it or do we get $1000 each?

[sockboy]

When they sent out the "household" cheques in Alberta it was based on what you had reported as your marital status on your income tax. So the following happened:

- married couples shared the amount
- older single children living at home who had earned $ and filed taxes got their own cheque. (I think you had to be over 16)
- people living as room-mates etc each got their own cheque (as they were "single" on their income tax form.

[sockboy]

I thought the whole point of an HST was to REDUCE the overall tax burden. When it was implemented in other provinces, the total amount went down (although it was charged on more things). Why would Ontario introduce a new system without reducing the total amount. (say 12% even, instead of the current 13%.)

[mkjr]

i thought the whole point of an hst was to reduce the overall tax burden. When it was implemented in other provinces, the total amount went down (although it was charged on more things). Why would ontario introduce a new system without reducing the total amount. (say 12% even, instead of the current 13%.)

greeeeeeedd!

[sockboy]

Yes, greed obviously, but politically it seems like suicide. You can "sell" the public on an HST if it reduces the total - even by 1%. Most people figure it will balance out. But this is obviously just a tax increase as they are taxing items that weren't subject to the PST before. Really stupid move. When is the next election?!

[amroache]

this is absolutely ridiculous! So, basically they are bribing every Ontarian with their own money of 1000 bux?? Does Mcgenius think we're all dumb idiots here? A 1000 dollars per household with combined income of less than 160,000? where did he come up with this?
...and 8% tax on houses 400,000 and over? Why 400K and not 300K or 500K? He's basically screwing with many Ontarians who may have saved up over the years to buy their first house. I mean ppl who are buying north of the city and in the downtown core should be furious about this. Is he forcing every middle income earner in ontario to be near the poverty line?

Geez, maybe McGuinty should think of slashing services and large spending first? I mean if you're in debt, your spending habit changes and you don't buy more. This stimulus spending is getting way out of hand. All i have to say is stop spending, and let the recession run its damn course!!:mad: Canada was already due for a recession anyways.

Could not have said it any better.

[EugW]

When is the next election?!
I mentioned it earlier in the thread but they timed it well for themselves. The next election is a couple of years away, and the Conservatives effectively have no leader at the moment.

[Jonavin]

Has anybody mentioned INFLATION? Prices will increase and because of these new taxes and new money ($1000). You can say good bye to your sweet low mortgage rates.

[charliebrown]

Has anybody mentioned INFLATION? Prices will increase and because of these new taxes and new money ($1000). You can say good bye to your sweet low mortgage rates.

Unfortunate, this "new" money doest get paid until 2010...

I know there are lots of people complaining about the PST on NEW homes...how many people are buying new homes though?

I guess the most direct impact for me will be no more $3.99 meals subject to only 1 tax :(

[EugW]

Unfortunate, this "new" money doest get paid until 2010...

I know there are lots of people complaining about the PST on NEW homes...how many people are buying new homes though?
Lots. Fortunately, most of those are in the under $400000 range, as most are condos and townhouses.

In the nicer areas in Toronto it would hit the demolish-and-rebuild group. For the longest time developers would watch like hawks the old brick bungalows occupied by 90 year olds, and then would swoop in to buy it to build a modern home on the lot. All of these rebuilt homes are well over $500000, so the tax burden will be high.

Of course, it also annoys those who are closing their new condo purchases this year. They will pay GST. I suspect if the rules are such as we think, then condo builds will stall more this year, until they can exempt from those taxes in 2010.

[HighFlyer]

I guess the most direct impact for me will be no more $3.99 meals subject to only 1 tax :(
Do you own a home? Even rent? Your utility bills which weren't subject to PST will now be taxed an extra 8%. The price of gas will also be hit, which based on today's prices is an extra 6-7 cents a liter. Since this is a percentage tax, the amount of PST on gas increases as the price of gas rises.

[charliebrown]

Do you own a home? Even rent? Your utility bills which weren't subject to PST will now be taxed an extra 8%. The price of gas will also be hit, which based on today's prices is an extra 6-7 cents a liter. Since this is a percentage tax, the amount of PST on gas increases as the price of gas rises.

Ouch...didnt see the PST impact on utilities....guess we'll have to cut down consumption by 8% :D

The tax on tax within gasoline is getting pretty rediculous

[speedyforme]

so say if I get the $1,000, does this mean things will break even if I manage to spend $12,500 a year on otherwise non-PST items previously?

So like you take al lthe items you spend a year that were not PST taxed, 8% of that = $1,000. Does anyone spend more than $12,500 a year on non-PST taxed items?

Not sure about the entire list...

Not including new homes of course...

[sockboy]

Isn't GST on gas a cent per litre tax? Not a % tax? Wouldn't the HST be the same? (Not that I'm defending this plan or anything!)

[HighFlyer]

Isn't GST on gas a cent per litre tax? Not a % tax? Wouldn't the HST be the same? (Not that I'm defending this plan or anything!)

5% right now on gas (and that's on top of the per liter federal and provincial excise taxes which make up a good portion of the pump price). This will now increase to 13%.

[onlineharvest]

Ouch...didnt see the PST impact on utilities....guess we'll have to cut down consumption by 8% :D

The tax on tax within gasoline is getting pretty rediculous

Does the government believe this will be good for them on the next election? Who is on the planning committee anyway!

What does it matter. He said he would remove the health tax, didn't, and he still won a majority.

The government is a very powerful thief and there appears to be nothing we can do to stop them.

[sockboy]

so say if I get the $1,000, does this mean things will break even if I manage to spend $12,500 a year on otherwise non-PST items previously?

So like you take al lthe items you spend a year that were not PST taxed, 8% of that = $1,000. Does anyone spend more than $12,500 a year on non-PST taxed items?

Not sure about the entire list...

Not including new homes of course...

I think it has been established that the $1000 for one year only, not an annual thing. But we need confirmation on that. $12500 does sound like a lot to spend on the items that will now be subject to PST. . . . Utilities would be the big one for most people.

[onlineharvest]

so say if I get the $1,000, does this mean things will break even if I manage to spend $12,500 a year on otherwise non-PST items previously?

So like you take al lthe items you spend a year that were not PST taxed, 8% of that = $1,000. Does anyone spend more than $12,500 a year on non-PST taxed items?

Not sure about the entire list...

Not including new homes of course...

That also assumes this proposed "annual" $1000 payout REMAINS. Whose to say it doesn't? If politicians can say they will remove a tax and don't, what stops them from eliminating something that was once promised to be perpetual (if they even claim that).

[speedyforme]

I think it has been established that the $1000 for one year only, not an annual thing. But we need confirmation on that. $12500 does sound like a lot to spend on the items that will now be subject to PST. . . . Utilities would be the big one for most people.

Yeah. I was trying to calculate this and just seeing the break-even point.

I hope we hear some news about annual vs one-time. I've heard both so I'll pray for the former since this HST sounds like it's gonna go through.

I think if a "family" is more than 1 person, then it's a lot easier to hit $12,500.

[speedyforme]

That also assumes this proposed "annual" $1000 payout REMAINS. Whose to say it doesn't? If politicians can say they will remove a tax and don't, what stops them from eliminating something that was once promised to be perpetual (if they even claim that).

Well then that is fair game for anything.

They could remove HST altogether in 3 years or lower the PST rate. :lol: *yeah right*

[Bincent]

How did McGuinty slide this through so quickly?? And doesn't this have to be voted in before it takes effect?

Someone needs to tax McGuinty by burning his house and blowing up his car and see how he feels... I'm pissed :mad:

[Archanfel]

And for single person, the limit is $80,000. Nice, the politicians know their math. :D

[onlineharvest]

How did McGuinty slide this through so quickly?? And doesn't this have to be voted in before it takes effect?

Someone needs to tax McGuinty by burning his house and blowing up his car and see how he feels... I'm pissed :mad:

Well, Ontarians did vote him in with a majority.

As long as his party supports it, who can oppose him. All you and we can do is ***** (like we are!) and punish him in the next election. Since we said we would do that in the LAST election, why do I doubt that possibility.

[eelfliw]

this is absolutely ridiculous! So, basically they are bribing every Ontarian with their own money of 1000 bux??

Nope. They're not bribing every Ontarian. The $1000 is only given to each "family" though I have no idea what constitutes a "family". Technically, all my siblings, parents, children & uncles & aunts are in the same family. But we each have our own families too. McDork needs to clarify this.

Also, the $1000 is only given to families with less than $160K annual income. That excludes a lot of families in Ontario. Say parents make $40K each and two children also make $40K each. That family will get no rebate. And $40K isn't exactly a "high" income any more these days.

[go leafs]

Provincial revenues will be going down... it's not a tax grab. It just shifts some of the burden from producers to consumers (although technically many of the taxes are already built into the price of goods/services). It simplifies tax collection and makes sales tax rules more universal across the country. It is great for companies that make products in Ontario and export them. It reduces costs for businesses (estimated savings of $5 billion).

It's good in the long term for the economy. For consumers insurance premiums will all go down in price (subject to PST, not HST). It will cost the average consumer about $14-70 more per year. In Atlantic Canada investment increased substantially and consumer prices actually fell (because the costs of their products were lower).

The government figures people aren't very smart... they're just going to scream about high taxes and not look at pros and cons. If we aren't intelligent enough to look at the overall benefits etc of the plan, then we can probably be bought easily... the $1000 is basically a bribe. (http://ca.news.yahoo.com/s/capress/090326/national/ontbudget_hst) I think it's a waste of money, but I guess it will placate people.

[EugW]

I think they would have gotten less screaming if they capped taxes on new home builds and they reduced the PST component of the HST so that the combined tax were 12% or less. The bribe will placate some people, but an actual and visible reduction in taxes and reigned-in spending would have impressed many more people IMO.

[Archanfel]

Provincial revenues will be going down... it's not a tax grab. It just shifts some of the burden from producers to consumers (although technically many of the taxes are already built into the price of goods/services). It simplifies tax collection and makes sales tax rules more universal across the country. It is great for companies that make products in Ontario and export them. It reduces costs for businesses. It's good in the long term for the economy. For consumers insurance premiums will all go down in price (subject to PST, not HST). It will cost the average consumer about $14-70 more per year. In Atlantic Canada investment increased substantially and consumer prices actually fell (because the costs of their products were lower)

The government figures people aren't very smart... they're just going to scream about high taxes and not look at pros and cons. If we aren't intelligent enough to look at the overall benefits etc of the plan, then we can probably be bought easily... the $1000 is basically a bribe. I think it's a waste of money, but I guess it will placate people.

An average driver drives about 20,000 km per year. That's 2000 liters of gas. At $1/liter, that's $2000. 8% of that is $160 for gas alone. So forgive me for not believing your numbers.

Now we know why McGuinty is still in office. :D

[onlineharvest]

An average driver drives about 20,000 km per year. That's 2000 liters of gas. At $1/liter, that's $2000. 8% of that is $160 for gas alone. So forgive me for not believing your numbers.

Now we know why McGuinty is still in office. :D

Go even further, if we threw out a number like $1200 for Gas and $800 for Electricity, that is an additional $160. I second your skepticism!

[George W. Bush]

Who qualifies for this? Married couple with kids only? Married couple without kids? Singles? What about separated people?

When does this law come into effect?

[setell]

An average driver drives about 20,000 km per year. That's 2000 liters of gas. At $1/liter, that's $2000. 8% of that is $160 for gas alone. So forgive me for not believing your numbers.

Now we know why McGuinty is still in office. :D

20,000KM's a year!!!! WOW where do you go!

[go leafs]

An average driver drives about 20,000 km per year. That's 2000 liters of gas. At $1/liter, that's $2000. 8% of that is $160 for gas alone. So forgive me for not believing your numbers.

Now we know why McGuinty is still in office. :D

We will still have similar gas prices to many other provinces.... they are much less likely to use transit, but they still survive. And car insurance premiums will be going down (they have PST, but no gst/hst), so that should balance out a lot of the gas increase.

edit: found a better statistic http://www.tc.gc.ca/pol/en/report/anre2005/7D_e.htm
average driver went 17,000 km in 2004 + 11.1 average milage. 1887 litres.. good estimate

[EugW]

20,000KM's a year!!!! WOW where do you go!
Well, I guess if you live in Kingston, the commute would generally be short.

However, if you live in the GTA, your commute could be long. I don't hit 20000 km a year, but some of my colleagues go well over that.

[speedyforme]

I would agree that 20K km seems about right. I don't use that much but my family would easily use over that every year in the family car.

[George W. Bush]

Who qualifies for this? Married couple with kids only? Married couple without kids? Singles? What about separated people?

When does this law come into effect?

[mada726]

this is blasphemy! This is madness!!

McGuinty doing another deficit?! I had enough of those already! As for the HST, I really hated it.

[go leafs]

Who qualifies for this? Married couple with kids only? Married couple without kids? Singles? What about separated people?

When does this law come into effect?

we'll know in half an hour.. (budget)

[HighFlyer]

For consumers insurance premiums will all go down in price (subject to PST, not HST).

I suspect they'll all be lumped into the HST (as they want to simplify things :rolleyes:). Currently auto premiums are taxed at 5% PST.

[go leafs]

I suspect they'll all be lumped into the HST (as they want to simplify things :rolleyes:). Currently auto premiums are taxed at 5% PST.

AFAIK in provinces with HST there is no tax on insurance (unless they have some extra provincial tax). Why would it be different for Ontario? I think part of the attraction for HST is similar tax rules across the country.

[hunt3rshadow]

McGuinty.........screw the tax and trying to save us from recession. Let the recession happen. Its going to hit us eventually. Hell its already hit us. I hate all that BS Stephen Harper saying "Recession hasn't hit us yet" Stupid fool of a PM. McGuinty, enjoy your next few years in office. It'll be your last/

[Archanfel]

20,000KM's a year!!!! WOW where do you go!

The rule of thumb for buying a used car is 20,000 a year. If somebody has a 10 years old car that only has 50,000 on it, don't take it as a good thing because it's likely driven exclusively on local.

[setell]

Well, I guess if you live in Kingston, the commute would generally be short.

However, if you live in the GTA, your commute could be long. I don't hit 20000 km a year, but some of my colleagues go well over that.

I would agree that 20K km seems about right. I don't use that much but my family would easily use over that every year in the family car.

WOW! I think I'm quite content with smaller cities then. I drove back home to Halifax from Kingston twice last year and we're still well below the 10,000KM mark! Gas alone will be a killer if you guys do that much driving!

[Caillo]

Ontario economy is dying... Solution? Impose the sales tax on more goods & services...

Great idea Dalton! I'm sure the 8% effective increase on the price of many goods and services will get people to spend money in hords.

Idiot... :mad: Not even my die-hard Liberal friends are buying into this move. The $1K payout is fooling nobody either (nice try).

[mself084]

12 mins to go! I can feel the excitement in this thread, i really can...

[go leafs]

http://www.fin.gov.on.ca/english/budget/ontariobudgets/

live webcast
http://www.ontla.on.ca/web/go2.jsp?Page=/webcast/webcast_main&locale=en

[go leafs]

Massive press release

http://www.newswire.ca/en/releases/archive/March2009/26/c4559.html




QUICK FACTS

Preserving and Creating Jobs Today

<<
- The McGuinty government is allocating $32.5 billion for
infrastructure projects over the next two years, supporting an
estimated 146,000 jobs in 2009-10 and 168,000 jobs in 2010-11.

- The 2009 Budget allocates nearly $700 million over the next two years
to new skills training and literacy initiatives and enhancements to
existing programs.

- The government is increasing funding for summer employment
opportunities for youth to nearly $90 million, which would benefit
more than 100,000 young people this summer, including youth in
high-needs communities.

Investing in Children and Families

- The government is providing $400 million more in children's benefits
over the next three years, providing low- and middle-income families
with up to $1,100 annually per child in Ontario Child Benefit
payments starting this July, providing additional payments to 115,000
families.

- The government is providing $1.2 billion to renovate 50,000 social
housing units and build 4,500 new affordable housing units for low-
income seniors and people with disabilities.

Creating Jobs Tomorrow

Green Jobs for Tomorrow

- The government is providing approximately $390 million to match
Ontario's estimated share of the federal Green Infrastructure Fund to
develop initiatives that assist in the implementation of the proposed
Green Energy and Green Economy Act, 2009.

Accelerating Innovation

- The Budget announces $250 million over five years for a new Emerging
Technologies Fund that will include investments in green technology.

Comprehensive Tax Package

- Starting July 1, 2010, pending legislative approval, Ontario would
move to a modern, single value-added sales tax to make Ontario more
competitive and lead to job creation. Four Canadian provinces and
more than 130 countries have adopted a value-added tax structure,
which is more efficient than a retail sales tax and would enhance the
ability of Ontario businesses to compete and grow.
- Books, diapers, children's clothing and footwear, children's car
seats and car booster seats, and feminine hygiene products would
be exempt from the provincial portion of the single sales tax
- To support new housing, newly constructed homes under $400,000
would not be subject to an additional tax burden. Buyers of new
homes valued between $400,000 and $500,000 could also claim a
proportional rebate.

- The McGuinty government is proposing $10.6 billion in temporary and
permanent tax relief for people over three years to help consumers
through the transition, and to provide a permanent personal income
tax reduction and enriched ongoing sales tax and property tax relief
for low- to middle-income people.
- Eligible families with an income of $160,000 or less would get
three payments totalling $1,000 to help them adjust to the new
single sales tax. Eligible single people with an income of $80,000
or less would get three payments totalling $300
- The first benefit payment would arrive in June 2010, the second in
December 2010 and the third in June 2011.

- The government is also proposing:
- One of the most generous sales tax credits in Canada, providing
low- and middle-income Ontarians with a permanent refundable
credit of up to $260 for each adult and child
- $1.1 billion in income tax cuts, giving Ontario the lowest
provincial tax rate in Canada for the first tax bracket.

- The 2009 Budget proposes $4.5 billion in tax cuts for businesses
over three years, making Ontario more competitive among its trading
partners. Once fully implemented, the comprehensive tax reform
package would cut Ontario's marginal effective tax rate on new
business investment in half, making Ontario one of the most
competitive jurisdictions in the industrialized world for new
investments. Starting July 1, 2010, the government would:
- Cut the general Corporate Income Tax (CIT) rate from 14 per cent
to 12 per cent and reduce the rate to 10 per cent by 2013
- Cut the CIT rate for small businesses from 5.5 per cent to
4.5 per cent
- Cut the CIT rate for manufacturing and processing - helping
businesses including farming, fishing, mining and logging - by
16.7 per cent, from 12 per cent to 10 per cent
- Eliminate the CIT small business deduction surtax, making Ontario
the only Canadian jurisdiction that would eliminate this barrier
to growing small businesses
- Exempt more small and medium-sized businesses from the Corporate
Minimum Tax and cut the CMT rate from four per cent to
2.7 per cent.

Responsible Fiscal Management

- The global economic crisis has reduced government revenues
significantly. The forecasted deficit is due to a significant
deterioration in revenues and short-term measures to stimulate the
economy, not to significant increases in core program spending.

- The 2009 Budget forecasts deficits of $3.9 billion in 2008-09 and
$14.1 billion in 2009-10. It lays out a plan to balance the budget by
2015-16 with the same prudent management that eliminated the $5.5
billion deficit that the government inherited in 2003.

Competitive Government

- To increase efforts to manage spending while protecting core public
services, the government will:
- Identify $1 billion in efficiencies in 2011-12
- Generate savings in the broader public sector by proposing certain
mandatory procurement activities, such as collaborative purchasing
- Propose freezing MPPs' salaries at their current level for the
2009-10 fiscal year
- Reduce the size of the Ontario Public Service by five per cent
over the next three years through attrition and other measures.

LEARN MORE

Read background information on the 2009 Ontario Budget:
- Preserving and Creating Jobs
www.fin.gov.on.ca/english/budget/ontariobudgets/2009/bk_jobstoday.html
- Investments to Create Jobs Tomorrow
www.fin.gov.on.ca/english/budget/ontariobudgets/2009/bk_jobstomorrow.html
- Comprehensive Tax Reform Package
www.fin.gov.on.ca/english/budget/ontariobudgets/2009/bk_tax.html
- Investing in Children and Families
www.fin.gov.on.ca/english/budget/ontariobudgets/2009/bk_families.html
- Ontario's Economic Outlook and Fiscal Plan
www.fin.gov.on.ca/english/budget/ontariobudgets/2009/bk_fiscalplan.html

Learn more about initiatives in the 2009 Budget for health
www.fin.gov.on.ca/english/budget/ontariobudgets/2009/sectors/healthsh.html,
education
www.fin.gov.on.ca/english/budget/ontariobudgets/2009/sectors/educationsh.html
and other sectors
www.fin.gov.on.ca/english/budget/ontariobudgets/2009/sectors/.

Read highlights of the Budget:
- 2009 Ontario Budget Highlights
www.fin.gov.on.ca/english/budget/ontariobudgets/2009/budhi.html
- Helping Ontario Families
www.fin.gov.on.ca/english/budget/ontariobudgets/2009/familieshi.html
- Tax Savings for Families and Businesses
www.fin.gov.on.ca/english/budget/ontariobudgets/2009/taxhi.html

Find out more about the comprehensive tax reform
www.fin.gov.on.ca/english/budget/ontariobudgets/2009/taxsavings/ package in
the 2009 Ontario Budget.

[Jungle]

Nobody mentioned if private car sales would not be subject to HST (13%) ? in Ontario. As of right now, all you have to pay is PST (8%).

[go leafs]

Personal Income Tax Relief

The government is proposing to provide more than $1.1 billion annually in
broadly based personal income tax relief by cutting the first tax rate by one
percentage point, from 6.05 per cent to 5.05 per cent, effective January 1,
2010. As a result, Ontarians would benefit from the lowest provincial tax rate
in Canada on the first $36,848 of taxable income; 93 per cent of Ontario
taxpayers would pay less personal income tax.

<<
---------------------------------------------------------
Ontario Personal Income Tax Rates (%)
---------------------------------------------------------
Taxable Income(1) Current (2009) Proposed (2010)
---------------------------------------------------------
$0-$36,848 6.05 5.05
$36,848-$73,698 9.15 9.15
(greater than) $73,698 11.16 11.16



hell ya

[Jungle]

Sorry, what does this mean? $250 off your taxes??

The government is also proposing:
- One of the most generous sales tax credits in Canada, providing
low- and middle-income Ontarians with a permanent refundable
credit of up to $260 for each adult and child

[go leafs]

Sorry, what does this mean? $250 off your taxes??

The government is also proposing:
- One of the most generous sales tax credits in Canada, providing
low- and middle-income Ontarians with a permanent refundable
credit of up to $260 for each adult and child

Maybe something like the GST credit.

[mself084]

$1000 for families, and $300 for singles... june 2010-june 2011 period. hmm.

[Archanfel]

blah, blah, blah, TAX GRAB!!!!, blah, blah, blah..... :D

[mself084]

What does this mean:

To support new housing, newly constructed homes under $400,000
would not be subject to an additional tax burden.

So the tax rate is still 5%? or it's 0%?

[go leafs]

Interesting... every other country in the OECD has a VAT like the HST (except the US)

Provincial Government revenues will be reduced with HST. Not a tax grab!

[go leafs]

Link to the budget

http://www.fin.gov.on.ca/english/budget/ontariobudgets/2009/

[UncleSteve]

Interesting... every other country in the OECD has a VAT like the HST (except the US)


Interestingly enough, a VAT of at least 15% is required for any nation in the EU.

[kellya]

Sorry, what does this mean? $250 off your taxes??

The government is also proposing:
- One of the most generous sales tax credits in Canada, providing
low- and middle-income Ontarians with a permanent refundable
credit of up to $260 for each adult and child

It looks to be pro-rated so unless you don't make much don't expect that much off. I just tried the rather pathetic calculator on the ontario budget website and we basically qualify for nothing (and we are a single income household and my husband doesn't make ridiculous amounts of money either) It appears that the only way we'd really "benefit" is if we made under $35K a year.

This is one sad budget. Watch the $1000 will end up being taxable.

Kelly

[f00kie]

Link to the budget

http://www.fin.gov.on.ca/english/budget/ontariobudgets/2009/

Thanks. It has some good explanations on some things, especially the tax rebate, so I encourage everyone to take a look.

[konfusion666]

So most of the "benefits" of the new budget won't arrive until June/July 2010.

But haven't the "experts" been saying that we may be OUT of a recession by then? If so, what's the point?

[Mayoo]

Same question here. I'm 19, live at home with parents, student, they earn more than 160k. I'm guessing they mean household as in address, so we'd both be SOL.

what happend to family renting out basements ??? i am pretty sure its not address. BTW who gets the money ? husband or wife ???

[gman]

what happend to family renting out basements ??? i am pretty sure its not address. BTW who gets the money ? husband or wife ???

Household is not an address. It is like GST rebate in your tax return. Only one person of the family (defined under the tax rule) can claim it.

[Archanfel]

Interesting... every other country in the OECD has a VAT like the HST (except the US)

Provincial Government revenues will be reduced with HST. Not a tax grab!

So let me get this straight, I am going to pay more for stuff now and the government will have lower revenues so they won't fixed the road outside my home. Wow, that's just wonderful, isn't it? Long live King Mcguinty!!! :D

Do you see my wallet getting fatter? No? Tax grab. :D

[WarrenC12]

Any income tax reductions for you people in Ontario?

The sooner governments understand, the better. Income tax BAD, consumption tax GOOD. :D

[rems]

So most of the "benefits" of the new budget won't arrive until June/July 2010.

But haven't the "experts" been saying that we may be OUT of a recession by then? If so, what's the point?

the point is then that if it takes longer than that, then they can credit the HST as the reason for getting out of the recession.

[VivienM]

The sooner governments understand, the better. Income tax BAD, consumption tax GOOD. :D

That's what the mainstream economics profession argues. As I've tried to argue 6 pages up in this thread, I'm not sure that's right... or that it will REMAIN the consensus view in 10 years once all the economists untangle the causes of the current crisis.

If anything, it seems TOO MUCH SAVINGS (which is what a consumption tax promotes... if it's principled - or do you want a cash grab on the poor?) is equally bad. Cheap savings (in this case, from export-driven Asian countries with screwy exchange rates) => reckless lending => asset bubbles => what's happening in the world right now.

[VivienM]

Personal Income Tax Relief

The government is proposing to provide more than $1.1 billion annually in
broadly based personal income tax relief by cutting the first tax rate by one
percentage point, from 6.05 per cent to 5.05 per cent, effective January 1,
2010. As a result, Ontarians would benefit from the lowest provincial tax rate
in Canada on the first $36,848 of taxable income; 93 per cent of Ontario
taxpayers would pay less personal income tax.

<<
---------------------------------------------------------
Ontario Personal Income Tax Rates (%)
---------------------------------------------------------
Taxable Income(1) Current (2009) Proposed (2010)
---------------------------------------------------------
$0-$36,848 6.05 5.05
$36,848-$73,698 9.15 9.15
(greater than) $73,698 11.16 11.16


Grrrrrreat. Thanks for reducing the value of my tuition credits!

[Frankie3s]

Single people making less than $80K get $300 yet couples making less than $160K get a 1K? How does this math add up? Shouldn't singles get at least $500?

As some of the posters said, they're just bribing us with our own money. All of this reminds me of the scene in slumdog millionaire where the guy gives the two kids cokes to get on the bus.

[dealguy2]

All I know is the whole country is laughing at cheronto right now. You always vote for socialists and then complain bitterly when it doesn't work out for you. At least this time you get to live with your own mess.

[dealguy2]

All tax BAD

I fixed it for you.

[go leafs]

All I know is the whole country is laughing at cheronto right now. You always vote for socialists and then complain bitterly when it doesn't work out for you. At least this time you get to live with your own mess.

HST is a Conservative policy... :D
so was cutting the corporate tax rates.

[go leafs]

Daw: What the budget means to you

Mar 26, 2009 05:11 PM
Be the first to comment on this article...
JAMES DAW
BUSINESS COLUMNIST
Ontario will take with one hand and give back with another when it joins with Ottawa to collect one big sales tax.

In the end, Finance Minister Dwight Duncan says most of us - 93 per cent -- will have slightly more in our pockets and small businesses. But it will be difficult for the average taxpayer to track what's going on.

We will still pay 13 per cent on most purchases — 8% provincial sales tax plus 5% federal. Bu, starting in July of next year, we will also pay 13 per cent on items that now attract only the federal goods and services tax.

We will pay more for fuel for our homes and cars, for electricity, professional services and new homes costing more than $500,000, but not on certain items like auto insurance and children's clothes.

When fully implemented, Ontario's cut of the new tax will raise $2.3 billion a year more than the $17.5 billion collected from the provincial sales tax last year.

Meanwhile other tax cuts announced yesterday would save individuals and families $2.4 billion. During the next couple of years we will receive temporary sales tax refunds the opposition parties call a pre-election bribe.

Starting in January, Ontario's lowest income tax rate will be cut by 1 percentage point to 5.05 per cent, and we will see less deducted from pay cheques right away.

The most anyone will save is $280 a year on incomes between $36,848 and about $60,000, says accountant Paul Hickey of KPMG. On higher incomes a revised provincial surtax will start to reduce the potential savings by as much as $40.

To smooth our ruffled feathers over the change in sales tax, we will get three cheques in the mail six months apart starting in June of next year. The three cheques will add up to a total of $300 for single persons and $1,000 for single parents and couples.

Additional tax relief will be targeted at low-income taxpayers through a new Ontario sales tax credit worth up to $260 per adult and child, and to low and middle-income taxpayers through an Ontario property tax credit worth up to $250 to $900 for non-seniors and $625 to $1,025 to seniors.

Hickey warns that the change in sale tax will hit financial service companies to such an extent that they may pass on the cost through higher fees and service charges.

Other businesses that charge sales tax will be able to claim a credit that spares them from bearing the cost of sales tax on their input costs. For example, it is estimated builders will be able to reduce the cost of new homes by 2 to 3 per cent, partially offsetting the impact of the sales tax on consumers spending more than $500,000 on a new home.

Other budget proposals will also have an impact on personal finances:

-Starting in 2010 a seniors' homeowner property tax grant will be doubled to a maximum of $500.

- Former members of pension plans will be permitted to access up to 50 per cent of locked-in life income funds effective next January, and for two years fees will be waived for those applying to access funds on grounds of hardship. Ontario now only permits 25 per cent to be withdrawn, with lesser maximum withdrawals after that one-time withdrawal

- The law will be changed to permit holders of the new tax-free savings accounts to designate a beneficiary and avoid having probate fees on the transfer to an heir.

- Amendments will permit employers - mainly in the public sector - to offer phased retirements. Employees would be permitted to work part-time and continue to earn pension credits while collecting a partial pension.

- The province will conduct the first actuarial projection study of the stability and financial strength of its Pension Benefits Guarantee Fund, which is currently in deficit and therefore not liable to pay any claims.

[Archanfel]

When fully implemented, Ontario's cut of the new tax will raise $2.3 billion a year more than the $17.5 billion collected from the provincial sales tax last year.

Somebody was telling me that the government revenue would lower due to the H tax.


Starting in January, Ontario's lowest income tax rate will be cut by 1 percentage point to 5.05 per cent, and we will see less deducted from pay cheques right away.

The most anyone will save is $280 a year on incomes between $36,848 and about $60,000, says accountant Paul Hickey of KPMG. On higher incomes a revised provincial surtax will start to reduce the potential savings by as much as $40.


Geez, another surtax, great. All hail to King Mcguinty.


Hickey warns that the change in sale tax will hit financial service companies to such an extent that they may pass on the cost through higher fees and service charges.


Somebody was telling me on how things will get cheaper.


-Starting in 2010 a seniors' homeowner property tax grant will be doubled to a maximum of $500.


Not a senior.


- Former members of pension plans will be permitted to access up to 50 per cent of locked-in life income funds effective next January, and for two years fees will be waived for those applying to access funds on grounds of hardship. Ontario now only permits 25 per cent to be withdrawn, with lesser maximum withdrawals after that one-time withdrawal


No need for it.


- The law will be changed to permit holders of the new tax-free savings accounts to designate a beneficiary and avoid having probate fees on the transfer to an heir.


You mean they were charging fees before? Geez.


- Amendments will permit employers - mainly in the public sector - to offer phased retirements. Employees would be permitted to work part-time and continue to earn pension credits while collecting a partial pension.


Public sector. Nice.


- The province will conduct the first actuarial projection study of the stability and financial strength of its Pension Benefits Guarantee Fund, which is currently in deficit and therefore not liable to pay any claims.

Another study. How much will that cost us I wonder.

[champlinD]

hst is a conservative policy... :d
so was cutting the corporate tax rates.

+1

[speedyforme]

$1000 for families, and $300 for singles... june 2010-june 2011 period. hmm.

once again singles are screwed, the only people who benefit are couples w/ no children who make just under $160k

[elty]

once again singles are screwed, the only people who benefit are couples w/ no children who make just under $160k

Except that single always get more benefit from other tax credit, so at the end, it is even.

[EugW]

Blended tax drives up costs for both new and resale home buyers in Ontario (http://www.google.com/hostednews/canadianpress/article/ALeqM5iePJC1vO_9O22QKZZ3rzaSiwoNvA)

The tax plan will provide a rebate for new homes sold between $400,000 and $500,000, though it will fully tax the value of new homes worth more than $500,000.

A 13 per cent tax on a high-end house in Toronto worth $1 million would add $130,000 in taxes on the property, in addition to provincial and local land transfer taxes currently charged.

Resold homes are exempt from the sales tax on their value, but buyers will still face higher taxes on all the upfront costs associated with closing the deal, such as legal fees, movers, real estate commissions and home inspection charges.

BTW, even $400000 homes are not completely exempted. They'll get a 75% rebate on the tax, which means a $400000 home is still gonna cost $13000 for tax. That's a decrease from the previous $20000, but nowhere near the $0 the rumours were suggesting.

So:

$200000 = $6500 tax
$300000 = $9750 tax
$400000 = $13000 tax
$500000.01 = $65000 tax
$600000 = $78000 tax
$700000 = $91000 tax
$800000 = $104000 tax
$900000 = $117000 tax
$1000000 = $130000 tax
$1250000 = $162500 tax
$1500000 = $195000 tax
$1750000 = $227500 tax
$2000000 = $260000 tax

I'm totally floored. And that's not even including additional land transfer taxes.

Basically anyone today who was drafting up a plan for a new detached home build in a nicer area of a big city is going to have to rethink his or her plan. Houses take a long time to build and if the plan was to built say a $800000 home, the taxes have suddenly jumped from $40000 to well over $100000. Just like that. This is absolutely crazy.

[antman59]

Wish our representative, even Liberals one had the ba!!$ to say no. Standing up for your constituents wow what a concept.:mad:

[go leafs]

Blended tax drives up costs for both new and resale home buyers in Ontario (http://www.google.com/hostednews/canadianpress/article/ALeqM5iePJC1vO_9O22QKZZ3rzaSiwoNvA)

The tax plan will provide a rebate for new homes sold between $400,000 and $500,000, though it will fully tax the value of new homes worth more than $500,000.

A 13 per cent tax on a high-end house in Toronto worth $1 million would add $130,000 in taxes on the property, in addition to provincial and local land transfer taxes currently charged.

Resold homes are exempt from the sales tax on their value, but buyers will still face higher taxes on all the upfront costs associated with closing the deal, such as legal fees, movers, real estate commissions and home inspection charges.

BTW, even $400000 homes are not completely exempted. They'll get a 75% rebate on the tax, which means a $400000 home is still gonna cost $13000 for tax. That's a decrease from the previous $20000, but nowhere near the $0 the rumours were suggesting.

So:

$200000 = $6500 tax
$300000 = $9750 tax
$400000 = $13000 tax
$500000.01 = $65000 tax
$600000 = $78000 tax
$700000 = $91000 tax
$800000 = $104000 tax
$900000 = $117000 tax
$1000000 = $130000 tax
$1250000 = $162500 tax
$1500000 = $195000 tax
$1750000 = $227500 tax
$2000000 = $260000 tax

I'm totally floored. And that's not even including additional land transfer taxes.

the price of a new home already includes GST, doesn't it? You may be both double counting GST and taxing PST on top of a tax.

[EugW]

the price of a new home already includes GST, doesn't it? You may be both double counting GST and taxing PST on top of a tax.
It does not. GST is on top of the price of a new home. I guess it depends on how your specific contract is worded though.

[thelefteyeguy]

Blended tax drives up costs for both new and resale home buyers in Ontario (http://www.google.com/hostednews/canadianpress/article/ALeqM5iePJC1vO_9O22QKZZ3rzaSiwoNvA)

The tax plan will provide a rebate for new homes sold between $400,000 and $500,000, though it will fully tax the value of new homes worth more than $500,000.

A 13 per cent tax on a high-end house in Toronto worth $1 million would add $130,000 in taxes on the property, in addition to provincial and local land transfer taxes currently charged.

Resold homes are exempt from the sales tax on their value, but buyers will still face higher taxes on all the upfront costs associated with closing the deal, such as legal fees, movers, real estate commissions and home inspection charges.

BTW, even $400000 homes are not completely exempted. They'll get a 75% rebate on the tax, which means a $400000 home is still gonna cost $13000 for tax. That's a decrease from the previous $20000, but nowhere near the $0 the rumours were suggesting.

So:

$200000 = $6500 tax
$300000 = $9750 tax
$400000 = $13000 tax
$500000.01 = $65000 tax
$600000 = $78000 tax
$700000 = $91000 tax
$800000 = $104000 tax
$900000 = $117000 tax
$1000000 = $130000 tax
$1250000 = $162500 tax
$1500000 = $195000 tax
$1750000 = $227500 tax
$2000000 = $260000 tax

I'm totally floored. And that's not even including additional land transfer taxes.

Basically anyone today who was drafting up a plan for a new detached home build in a nicer area of a big city is going to have to rethink his or her plan. Houses take a long time to build and if the plan was to built say a $800000 home, the taxes have suddenly jumped from $40000 to well over $100000. Just like that. This is absolutely crazy.


How did you get the cal'n for homes under $399,999.99? I can't find any info on taxes below 400K. I originally thought the PST will be exempt

[elty]

Blended tax drives up costs for both new and resale home buyers in Ontario (http://www.google.com/hostednews/canadianpress/article/ALeqM5iePJC1vO_9O22QKZZ3rzaSiwoNvA)

The tax plan will provide a rebate for new homes sold between $400,000 and $500,000, though it will fully tax the value of new homes worth more than $500,000.

A 13 per cent tax on a high-end house in Toronto worth $1 million would add $130,000 in taxes on the property, in addition to provincial and local land transfer taxes currently charged.

Resold homes are exempt from the sales tax on their value, but buyers will still face higher taxes on all the upfront costs associated with closing the deal, such as legal fees, movers, real estate commissions and home inspection charges.

BTW, even $400000 homes are not completely exempted. They'll get a 75% rebate on the tax, which means a $400000 home is still gonna cost $13000 for tax. That's a decrease from the previous $20000, but nowhere near the $0 the rumours were suggesting.

So:

$200000 = $6500 tax
$300000 = $9750 tax
$400000 = $13000 tax
$500000.01 = $65000 tax
$600000 = $78000 tax
$700000 = $91000 tax
$800000 = $104000 tax
$900000 = $117000 tax
$1000000 = $130000 tax
$1250000 = $162500 tax
$1500000 = $195000 tax
$1750000 = $227500 tax
$2000000 = $260000 tax

I'm totally floored. And that's not even including additional land transfer taxes.

Do you even know what you are talking about? New house is always subject to 5% GST (36% refundable if you use it as a primary residence for house worth less than 350k or some number like that). So you are not paying a cent extra if the house is less than $400000.

If you buy a 500K house then you are royally screwed, with additional tax burden of $40000.

[thelefteyeguy]

ok...you included GST in your caln

[EugW]

How did you get the cal'n for homes under $399,999.99? I can't find any info on taxes below 400K. I originally thought the PST will be exempt
One of the articles I read stated that homes up to $400000 would receive a 75% rebate of the HST. So, effectively, the HST for homes in this range would be 3.25%.

However, I've just read this article (http://www.thestar.com/news/ontario/article/608908) which has a different take on the rebates in the <$400000 house range:

Buyers of new homes will be able to apply for a sales tax rebate equal to 6 per cent of the home price up to $400,000 and a smaller rebate on prices up to $500,000. The full sales tax will apply to the entire price of homes costing more than $500,000 on consumers spending more than $500,000 on a new home.

So, the tax may in fact be higher than 3.25%, as high as 7%, which would actually represent an increase in taxes for new homes under $400000, and not an exemption.

What the articles do seem to agree upon though is that over $500000, the taxation would be for the full amount.

This will wreak havoc with the $400000-$600000 segment of homes, which also happens to be a large chunk of homes considered affordable in Toronto.

[Archanfel]

Except that single always get more benefit from other tax credit, so at the end, it is even.


For example?

[go leafs]

It does not. GST is on top of the price of a new home. I guess it depends on how your specific contract is worded though.

I dunno, this link says most GTA builders include the GST, and I checked out a few builders and they all included GST with their prices (mattamy, aspen ridge, empire)

http://www.tararosen.com/GST_New_Housing_Rebate_Program/page_246144.html

[thelefteyeguy]

One of the articles I read stated that homes up to $400000 would receive a 75% rebate of the HST. So, effectively, the HST for homes in this range would be 3.25%.

However, I've just read this article (http://www.thestar.com/news/ontario/article/608908) which has a different take on the rebates in the <$400000 house range:

Buyers of new homes will be able to apply for a sales tax rebate equal to 6 per cent of the home price up to $400,000 and a smaller rebate on prices up to $500,000. The full sales tax will apply to the entire price of homes costing more than $500,000 on consumers spending more than $500,000 on a new home.

So, the tax may in fact be higher than 3.25%, as high as 7%, which would actually represent an increase in taxes for new homes under $400000, and not an exemption.

What the articles do seem to agree upon though is that over $500000, the taxation would be for the full amount.

This will wreak havoc with the $400000-$600000 segment of homes, which also happens to be a large chunk of homes considered affordable in Toronto.

this just means that builders in the GTA (esp in Toronto) will be focusing on under 400K townhomes, and in most part condos. Semi-Detached and Detached new homes will not be built. Large homes catered to the rich prob won't care about the 8% PST.

So who does this affect...the middle class. McFly just pissed the whole middle class off.

Resale home values just shot up this afternoon.

Ontario's residential building industry just got F'ed

[Archanfel]

this just means that builders in the GTA (esp in Toronto) will be focusing on under 400K townhomes, and in most part condos. Semi-Detached and Detached new homes will not be built. Large homes catered to the rich prob won't care about the 8% PST.

So who does this affect...the middle class. McFly just pissed the whole middle class off.

I thought they would sell the house for $400K and then sell you a book collection for another $200K, like what they do on ebay with shipping. :D

[thelefteyeguy]

I thought they would sell the house for $400K and then sell you a book collection for another $200K, like what they do on ebay with shipping. :D

I was def'n thinking about this in the afternoon...there must be a way to pay under the table for the excess of $400K.

[EugW]

Do you even know what you are talking about? New house is always subject to 5% GST (36% refundable if you use it as a primary residence for house worth less than 350k or some number like that). So you are not paying a cent extra if the house is less than $400000.
Yes, I'm fully aware GST was already charged on new homes. However my numbers are HST, not HST-GST.

However, those numbers were based on a claim by one article that the rebate for sub-$400000 homes would be 75% of the HST. Now I see that Star article (http://www.thestar.com/news/ontario/article/608908) which suggests that the rebate may actually be only 6% of the purchase price.

Buyers of new homes will be able to apply for a sales tax rebate equal to 6 per cent of the home price up to $400,000 and a smaller rebate on prices up to $500,000. The full sales tax will apply to the entire price of homes costing more than $500,000.

If true, that means the tax on a $400000 house would actually be 7% or $28000, which would represent a substantial tax increase.

If you buy a 500K house then you are royally screwed, with additional tax burden of $40000.
Yes. It's absolutely bizarre. This is going to be a very big disincentive for developers to build anything other than condos and townhouses now.

Several small builders who specialize in detached homes are going to get hit hard.

this just means that builders in the GTA (esp in Toronto) will be focusing on under 400K townhomes, and in most part condos. Semi-Detached and Detached new homes will not be built. Large homes catered to the rich prob won't care about the 8% PST.
I guess it depends what you mean by rich. A person wanting a $550000 home is definitely not rich by most standards in Toronto, and an 8% price premium is actually quite significant to most people, when we're talking 6 to 7 digit home prices.

So who does this affect...the middle class. McFly just pissed the whole middle class off.

Ontario's residential building industry just got F'ed
Yup. What a way to stimulate the economy.

[elty]

For example?

GST credit:

Brother and sister living in the same house (sharing some cost), both earn $30000, GST rebate = $184.5 for 2 people.

Later on, the brother and sister discover they are not really siblings to each other, so they marry....

Husband and wife living in the same house (sharing some cost), both earn $30000, GST rebate = $0 for 2 people.

[thelefteyeguy]

[QUOTE=EugW;8493232]
I guess it depends what you mean by rich. A person wanting a $550000 home is definitely not rich by most standards in Toronto, and an 8% price premium is actually quite significant to most people, when we're talking 6 to 7 digit home prices.
QUOTE]

to clarify...the GTA (in most part where most new homes are built in Ontario) will only have under 400K homes (townhomes, Condos), and multi-million homes built. There will be no demand for middle of the road new semi-detached / detached homes in the GTA. All middle the road resale home value just shoot up.

[florch]

once again singles are screwed, the only people who benefit are couples w/ no children who make just under $160k

Because you believe one person deserves the same as 2 or more people while paying less tax?

[speedyforme]

Because you believe one person deserves the same as 2 or more people while paying less tax?

so are we saying if a married couple each make $79k a year, pays more than double the tax than a single person who makes $79k?

[EugW]

to clarify...the GTA (in most part where most new homes are built in Ontario) will only have under 400K homes (townhomes, Condos), and multi-million homes built. There will be no demand for middle of the road new semi-detached / detached homes in the GTA. All middle the road resale home value just shoot up.
There are several areas in the GTA where there are lots of small bungalows, being torn down and replaced with modern homes. These are areas where there are no condos and no townhouses, but the houses aren't multi-million dollar either. They're more in the $1 million - 1.5 million range. Unfortunately, in Toronto, such a house isn't necessarily anything spectacular. It's what a $700000 might get you in Richmond Hill.

The people that live in those houses are upper middle class. Very well off, but not filthy rich. So, for that group, the $130000+ tax is going to hit hard and such building will slow significantly as you suggest.

What I wonder is what will happen to those neighbourhoods. These are neighbourhoods in transition, with big modern homes next to ancient brick bungalows, often in bad shape. Will those modern homes shoot up in value? Or will the impediment to building give people pause for resales in those areas?

Actually what I think will happen is people will simply choose to gut the existing homes and do complete renovations, and maybe add a second floor. People use this as an excuse to skirt the extra taxes. It isn't an ideal situation though of course. I think existing larger homes will remain similar in value, but properly values won't increase as much in these areas, because building of similar new homes will slow. Despite the moderated price increases, there won't be increased availability at those prices.

[florch]

so are we saying if a married couple each make $79k a year, pays more than double the tax than a single person who makes $79k?
Yes. 2 people earning a total of $158k, $79k each, pay about double what a single earning $79k pays.

And a family with one earner making $158k and the other making $0 will pay way more than 2 earners making $79k each. Families are punished for instance, for raising your own children.

Singles have it best.

[go leafs]

Here are my calculations... feel free to critique. For Federal calcuation I used this form, part I (http://www.cra-arc.gc.ca/E/pbg/gf/gst190/gst190-08e.pdf)My assumption was that the 400-500k PST was a 36% rebate. AR= after rebate; 'actual price' = price without GST included.


Price Actual Price GST Paid P-HST to pay GST-AR PST-AR New Price Dif from Current Adv. Price
$100,000.00 $95,238.10 $4,761.90 $7,619.05 $3,047.62 $1,904.76 $100,190.48 $190.48
$200,000.00 $190,476.19 $9,523.81 $15,238.10 $6,095.24 $3,809.52 $200,380.95 $380.95
$300,000.00 $285,714.29 $14,285.71 $22,857.14 $9,142.86 $5,714.29 $300,571.43 $571.43
$399,000.00 $380,000.00 $19,000.00 $30,400.00 $15,511.60 $7,600.00 $403,111.60 $4,111.60
$400,000.00 $380,952.38 $19,047.62 $30,476.19 $15,619.05 $19,504.76 $416,076.19 $16,076.19
$499,000.00 $475,238.10 $23,761.90 $38,019.05 $23,761.90 $24,332.19 $523,332.19 $24,332.19
$500,000.00 $476,190.48 $23,809.52 $38,095.24 $23,809.52 $38,095.24 $538,095.24 $38,095.24
$600,000.00 $571,428.57 $28,571.43 $45,714.29 $28,571.43 $45,714.29 $645,714.29 $45,714.29



edit: adjusted $499k GST rebate

[EugW]

Here are my calculations... feel free to critique. For Federal calcuation I used this form, part I (http://www.cra-arc.gc.ca/E/pbg/gf/gst190/gst190-08e.pdf)My assumption was that the 400-500k PST was a 36% rebate. AR= after rebate; 'actual price' = price without GST included.


Price Actual Price GST Paid P-HST to pay GST-AR PST-AR New Price Dif from Current Adv. Price
$100,000.00 $95,238.10 $4,761.90 $7,619.05 $3,047.62 $1,904.76 $100,190.48 $190.48
$200,000.00 $190,476.19 $9,523.81 $15,238.10 $6,095.24 $3,809.52 $200,380.95 $380.95
$300,000.00 $285,714.29 $14,285.71 $22,857.14 $9,142.86 $5,714.29 $300,571.43 $571.43
$399,000.00 $380,000.00 $19,000.00 $30,400.00 $15,511.60 $7,600.00 $403,111.60 $4,111.60
$400,000.00 $380,952.38 $19,047.62 $30,476.19 $15,619.05 $19,504.76 $416,076.19 $16,076.19
$499,000.00 $475,238.10 $23,761.90 $38,019.05 $19,484.76 $24,332.19 $519,055.05 $20,055.05
$500,000.00 $476,190.48 $23,809.52 $38,095.24 $23,809.52 $38,095.24 $538,095.24 $38,095.24
$600,000.00 $571,428.57 $28,571.43 $45,714.29 $28,571.43 $45,714.29 $645,714.29 $45,714.29


One problem with that table is that for many new home purchases, $600000 actually means $600000. GST is not included. However, we can overlook that for the moment.

The assumption you made also is based on HST from other provinces. We'll see soon enough how much that applies here.

And the final point is that in Toronto, the mean is close to that $400000 mark. Even if your table is correct, it means that everyone gets a tax increase on new home sales, but a huge chunk of people in places like Toronto are getting huge tax increases. This is on top of dual land transfer taxes, from both the province of Ontario and from Toronto.

[Bullseye]

Article about the HST, saying it will be good for economy.

Ontario budget does what needed to be done

http://network.nationalpost.com/np/blogs/fullcomment/archive/2009/03/26/john-ivison-ontario-budget-does-what-needed-to-be-done.aspx

[go leafs]

One problem with that table is that for many new home purchases, $600000 actually means $600000. GST is not included. However, we can overlook that for the moment.

The assumption you made also is based on HST from other provinces. We'll see soon enough how much that applies here.

Yes, the assumption is that the $600k home would include GST.....

I used the 5% GST rate + the current 8% PST rate (labelled as H-PST), not the HST calculation on the form I linked to... not sure if it makes a difference - I didn't check.

If my numbers are correct, those under 400k would see a minimal increase, those over 500k would see a 7.6% increase in the price of a new home... 400-500 k would see about a 4-5% increase. On the other hand, some of this would be mitigated by decreased costs for builders (2-3% IIRC)


they might be all wrong if the builder is including the rebate when they include the GST price

[VivienM]

Yes. 2 people earning a total of $158k, $79k each, pay about double what a single earning $79k pays.

And a family with one earner making $158k and the other making $0 will pay way more than 2 earners making $79k each. Families are punished for instance, for raising your own children.

Singles have it best.

Huh?

Yes, the Canadian income tax system (unlike the American) favours dual-income couples over single-income couples.

But if you have a couple with two people earning $79K, they'll EACH pay the same income tax (minus a few credits that are split, e.g. rent) as a single earning $79K.

[EugW]

Yes, the assumption is that the $600k home would include GST.
To clarify for the others... This depends on your contract. Many mass market condo builds include GST in the listed price, because I guess they figure first time home buyers are too stupid to factor that in. However, this is often not the case.

You cannot assume either way. You have to check your contract. If you don't pay attention, you could be in for a nasty surprise.


If my numbers are correct, those under 400k would see a minimal increase, those over 500k would see a 7.6% increase in the price of a new home... 400-500 k would see about a 4-5% increase. On the other hand, some of this would be mitigated by decreased costs for builders (2-3% IIRC)
Your ~7.6% increase in the price of the $600000 home means a HUGE increase in taxes. A 160% increase in taxes in fact. Or, to put it another way, you're paying 260% of the taxes compared to previously.

That 4-5% increase in home prices in the $400000-500000 range is basically double the previous tax rate.

These types of tax hikes are absolutely absurd.

[thelefteyeguy]

Article about the HST, saying it will be good for economy.

Ontario budget does what needed to be done

http://network.nationalpost.com/np/blogs/fullcomment/archive/2009/03/26/john-ivison-ontario-budget-does-what-needed-to-be-done.aspx

I have no problem with the rest of the budget...but the majority has a huge problem with the HST.

If it was tax-neutral...I would have no problems with it. It's a tax grab; it's no secret.

[thelefteyeguy]

To clarify for the others... This depends on your contract. Many mass market condo builds include GST in the listed price, because I guess they figure first time home buyers are too stupid to factor that in. However, this is often not the case.

You cannot assume either way. You have to check your contract. If you don't pay attention, you could be in for a nasty surprise.



A 7.6% increase in the price of the home means a HUGE increase in taxes.

i'm 99.99% sure the savings will not be passed onto the new home buyers.

The industry is selling homes in Ontario...it's not like it's selling it to the rest of the world. It doesnt need to be competitive within Ontario. The pricing is based on supply and demand. If any of the top 10 builders in Ontario decides to just keep the savings...the rest of the players will just follow suit.

[EugW]

i'm 99.99% sure the savings will not be passed onto the new home buyers.

The industry is selling homes in Ontario...it's not like it's selling it to the rest of the world. It doesnt need to be competitive within Ontario. The pricing is based on supply and demand. If any of the top 10 builders in Ontario decides to just keep the savings...the rest of the players will just follow suit.
What savings? Even go leafs' own calculations state that taxes will up in every single category, even for new homes under $400000.

According to him, taxes will only go up sightly at the low end, but will go up hugely at the higher end.

These higher taxes will be passed onto the customers.

[florch]

Huh?

Yes, the Canadian income tax system (unlike the American) favours dual-income couples over single-income couples.

But if you have a couple with two people earning $79K, they'll EACH pay the same income tax (minus a few credits that are split, e.g. rent) as a single earning $79K.
Sorry for being unclear. Yes I agree with what you're saying.

My opinion is that family income should be the consideration as in the USandA.

[fantom]

^^ you may still lose, because if your clients have to shell out additional money, they will most likely look elsewhere for 'your' type of services.. which means your out a client and out of business.

Not necessarily... especially given my clients and type of work I do (they can't "afford" to look elsewhere for expertise) ;)

Well you could end up losing your contracts. You are now 8% more expensive than contractors from other provinces, and the money is not even going into your pocket.

And no, I actually do get to keep a portion of claimed GST (and now PST) too... ;)

[belowzeros]

If it was tax-neutral...I would have no problems with it. It's a tax grab; it's no secret.


I'll plus one that. It's very transparently just that. What gets my blood going is the finance Minister saying it isn't. Ontario is in financial trouble I get it. Don't sugar coat it and lie to me up and down though and presume my mother raised a fool. I don't think the majority of Ontarian are that delusional Minister.

[VivienM]

My opinion is that family income should be the consideration as in the USandA.

Except that that's an incentive for single-income families, and as a policy matter (hint: look at what happens to single-income families after divorce), I'm not sure the tax system should be trying to encourage single-income families...

[florch]

Except that that's an incentive for single-income families, and as a policy matter (hint: look at what happens to single-income families after divorce), I'm not sure the tax system should be trying to encourage single-income families...

That's a value judgment, and discriminates against families who choose to raise their own children, or for health reasons decide for one partner to stay home.

Basing taxes on family income gives choice; being even it doesn't provide an incentive to either choice - it leaves it as a choice.

The reward - you raise your own kids, the risk, one partner has to re-learn work skills.

Remember, we aren't replacing ourselves except through immigration, and discouraging families isn't helping.

[Archanfel]

Article about the HST, saying it will be good for economy.

Ontario budget does what needed to be done

http://network.nationalpost.com/np/blogs/fullcomment/archive/2009/03/26/john-ivison-ontario-budget-does-what-needed-to-be-done.aspx

I will have no problem with it if it is done fairly. Even if the tax rate is raised to 100%, consumption taxes are always better than income taxes. However, first of all, this was not a revenue neutral change. They should have taken the additional taxes they got and cut income taxes accordingly. I can even live with a flat cut to the lowest bracket. Instead, they not only didn't cut income taxes enough, they added salt to injury by jacking up the surtaxes. Secondly, whatever compensation we get should be distributed equally to the people. Instead, they again rob the hard working Ontarionians to subsidize those "less fortunate" or those who chose a particular life style.

I know fairness is not the Canadian way and I can and will have to live with it, but the government seems to take every opportunities to remind me of that.

[VSOP]

OK, nowhere in internet could I find an answer to the following:

1. If I have purchased a house/condo for 403,000 year and a half ago and it is still under construction - what will be the effect of this new tax?

2. If I want to buy a new condo, say, next year for 450,000 , will it be taxed with hst on 50,000 or 450,000

3. Anything for the fist-time buyers???

Thanks,

[onlineharvest]

Blended tax drives up costs for both new and resale home buyers in Ontario (http://www.google.com/hostednews/canadianpress/article/ALeqM5iePJC1vO_9O22QKZZ3rzaSiwoNvA)

The tax plan will provide a rebate for new homes sold between $400,000 and $500,000, though it will fully tax the value of new homes worth more than $500,000.

A 13 per cent tax on a high-end house in Toronto worth $1 million would add $130,000 in taxes on the property, in addition to provincial and local land transfer taxes currently charged.

Resold homes are exempt from the sales tax on their value, but buyers will still face higher taxes on all the upfront costs associated with closing the deal, such as legal fees, movers, real estate commissions and home inspection charges.

BTW, even $400000 homes are not completely exempted. They'll get a 75% rebate on the tax, which means a $400000 home is still gonna cost $13000 for tax. That's a decrease from the previous $20000, but nowhere near the $0 the rumours were suggesting.

So:

$200000 = $6500 tax
$300000 = $9750 tax
$400000 = $13000 tax
$500000.01 = $65000 tax
$600000 = $78000 tax
$700000 = $91000 tax
$800000 = $104000 tax
$900000 = $117000 tax
$1000000 = $130000 tax
$1250000 = $162500 tax
$1500000 = $195000 tax
$1750000 = $227500 tax
$2000000 = $260000 tax

I'm totally floored. And that's not even including additional land transfer taxes.

Basically anyone today who was drafting up a plan for a new detached home build in a nicer area of a big city is going to have to rethink his or her plan. Houses take a long time to build and if the plan was to built say a $800000 home, the taxes have suddenly jumped from $40000 to well over $100000. Just like that. This is absolutely crazy.

Does this mean the new tax will affect already signed purchased agreements where the property is finished after this new tax comes into effect? Or if a purchase agreement is in place today (and up to it comes into effect), the new tax does not apply?

[EugW]

Does this mean the new tax will affect already signed purchased agreements where the property is finished after this new tax comes into effect? Or if a purchase agreement is in place today (and up to it comes into effect), the new tax does not apply?
No idea. Hopefully we'll find out soon.

I've been looking for more information but I've found the reporting curiously lacking. I'm sure one of the real estate mouthpieces will come out with some scathing report tomorrow though... and I'll probably actually agree with it.

[Archanfel]

GST credit:

Brother and sister living in the same house (sharing some cost), both earn $30000, GST rebate = $184.5 for 2 people.

Later on, the brother and sister discover they are not really siblings to each other, so they marry....

Husband and wife living in the same house (sharing some cost), both earn $30000, GST rebate = $0 for 2 people.

Ewwww.... :D

How about single people who do not get GST rebate? They never had any advantage and now they are being screwed over. Middle class single people seems to be the government's favorite target. Well, middle class couples as well, but less so.

[Archanfel]

Yes. 2 people earning a total of $158k, $79k each, pay about double what a single earning $79k pays.

And a family with one earner making $158k and the other making $0 will pay way more than 2 earners making $79k each. Families are punished for instance, for raising your own children.

Singles have it best.

How so? One earning making $158K will pay exactly the same no matter whether he/she is married or single. The partner get screwed for $200, but that's his/her choice. At least the government didn't ask you to pay taxes on the income you should have got for taking care of the baby. :D

[VivienM]

That's a value judgment, and discriminates against families who choose to raise their own children, or for health reasons decide for one partner to stay home.

Basing taxes on family income gives choice; being even it doesn't provide an incentive to either choice - it leaves it as a choice.

The reward - you raise your own kids, the risk, one partner has to re-learn work skills.

Remember, we aren't replacing ourselves except through immigration, and discouraging families isn't helping.

But doing it the way you're suggesting is ALSO a value judgment. :) It just happens to reflect values you prefer.

And the American system, for what it's worth, is known to discourage marriage: apparently a couple earning $160K (each spouse earning $80K) would pay more tax than two singles earning $80K... that's another value judgment right there.

[VivienM]

Middle class single people seems to be the government's favorite target. Well, middle class couples as well, but less so.

You have to understand that modern government essentially redistributes money from singles and child-free couples to couples with children and seniors.

Couples with children and seniors, of course, vote in much higher numbers than singles. Coincidence?

[intellin_96]

Here are my calculations... feel free to critique. For Federal calcuation I used this form, part I (http://www.cra-arc.gc.ca/E/pbg/gf/gst190/gst190-08e.pdf)My assumption was that the 400-500k PST was a 36% rebate. AR= after rebate; 'actual price' = price without GST included.


Price Actual Price GST Paid P-HST to pay GST-AR PST-AR New Price Dif from Current Adv. Price
$100,000.00 $95,238.10 $4,761.90 $7,619.05 $3,047.62 $1,904.76 $100,190.48 $190.48
$200,000.00 $190,476.19 $9,523.81 $15,238.10 $6,095.24 $3,809.52 $200,380.95 $380.95
$300,000.00 $285,714.29 $14,285.71 $22,857.14 $9,142.86 $5,714.29 $300,571.43 $571.43
$399,000.00 $380,000.00 $19,000.00 $30,400.00 $15,511.60 $7,600.00 $403,111.60 $4,111.60
$400,000.00 $380,952.38 $19,047.62 $30,476.19 $15,619.05 $19,504.76 $416,076.19 $16,076.19
$499,000.00 $475,238.10 $23,761.90 $38,019.05 $23,761.90 $24,332.19 $523,332.19 $24,332.19
$500,000.00 $476,190.48 $23,809.52 $38,095.24 $23,809.52 $38,095.24 $538,095.24 $38,095.24
$600,000.00 $571,428.57 $28,571.43 $45,714.29 $28,571.43 $45,714.29 $645,714.29 $45,714.29



edit: adjusted $499k GST rebate

Nice calculations done. It revealed that how Ontarian's new home buyers will be robbed. Ironically, in the budget it calls the rebate a tax saving while it didn't say that "WE WILL TAX YOU 8% MORE FIRST, THEN YOU CAN GET 6% BACK FORM US AND ANOTHER 2% FROM THE BUILDER". I believe everybody can see the trick in it.

BTW, anybody know what impact it will have on new homes bought now but will be closed after July 1, 2010 which is the HST effective date? I believe any purchase agreement signed before July 1, 2010 should be exempted, but you never know what the Ontario government will do. :(

[Archanfel]

You have to understand that modern government essentially redistributes money from singles and child-free couples to couples with children and seniors.

Couples with children and seniors, of course, vote in much higher numbers than singles. Coincidence?

The miracle we call democracy.

[onlineharvest]

What savings? Even go leafs' own calculations state that taxes will up in every single category, even for new homes under $400000.

According to him, taxes will only go up sightly at the low end, but will go up hugely at the higher end.

These higher taxes will be passed onto the customers.

It might also affect the types of homes constructed. More townhouses and semis built at a size that will be tax efficient maybe?

[intellin_96]

No idea. Hopefully we'll find out soon.

I've been looking for more information but I've found the reporting curiously lacking. I'm sure one of the real estate mouthpieces will come out with some scathing report tomorrow though... and I'll probably actually agree with it.

Call Budget hotline:
Public Inquiries
1-800-337-7222

they probably won't have an answer yet.

[mself084]

Here are my calculations... feel free to critique. For Federal calcuation I used this form, part I (http://www.cra-arc.gc.ca/E/pbg/gf/gst190/gst190-08e.pdf)My assumption was that the 400-500k PST was a 36% rebate. AR= after rebate; 'actual price' = price without GST included.


Price Actual Price GST Paid P-HST to pay GST-AR PST-AR New Price Dif from Current Adv. Price
$100,000.00 $95,238.10 $4,761.90 $7,619.05 $3,047.62 $1,904.76 $100,190.48 $190.48
$200,000.00 $190,476.19 $9,523.81 $15,238.10 $6,095.24 $3,809.52 $200,380.95 $380.95
$300,000.00 $285,714.29 $14,285.71 $22,857.14 $9,142.86 $5,714.29 $300,571.43 $571.43
$399,000.00 $380,000.00 $19,000.00 $30,400.00 $15,511.60 $7,600.00 $403,111.60 $4,111.60
$400,000.00 $380,952.38 $19,047.62 $30,476.19 $15,619.05 $19,504.76 $416,076.19 $16,076.19
$499,000.00 $475,238.10 $23,761.90 $38,019.05 $23,761.90 $24,332.19 $523,332.19 $24,332.19
$500,000.00 $476,190.48 $23,809.52 $38,095.24 $23,809.52 $38,095.24 $538,095.24 $38,095.24
$600,000.00 $571,428.57 $28,571.43 $45,714.29 $28,571.43 $45,714.29 $645,714.29 $45,714.29



edit: adjusted $499k GST rebate

Good stuff! thanks for that.

HST is really screwing over new home sales in Ontario... a few people have asked and i'd really like to know the answer: what about people who have already signed their agreements? if u close after july 2010 are u stuck paying HST, or just GST? guess these details will come out in the next few weeks.

[EugW]

It might also affect the types of homes constructed. More townhouses and semis built at a size that will be tax efficient maybe?
Yes, it's been mentioned. However, in some areas even the semis will be problematic. It will be condos and townhouses. Semis would start to head into the high tax price ranges.

BTW, some cities love that. Higher population density = higher taxation density and higher efficiency for transit. Toronto has been looking for ways to greatly increase tax revenue. Ways they're thinking of doing that or have already done that:

1) Increase property taxes
2) Ask for more money from higher ups. This is coming in the new Ontario budget in the form of infrastructure spending.
3) New land transfer tax
4) Rezoning of industrial/retail areas to allow medium density and high density housing.

[onlineharvest]

Good stuff! thanks for that.

HST is really screwing over new home sales in Ontario... a few people have asked and i'd really like to know the answer: what about people who have already signed their agreements? if u close after july 2010 are u stuck paying HST, or just GST? guess these details will come out in the next few weeks.

I asked that earlier and it remains to be seen.

However, I don't believe they can retroact a tax on a completed purchase agreement. It is similar to when I purchased a new home. Rules were just changing for increased land transfer tax. My home closed after the change but I purchased the house prior to the change. The new and higher rates were not charged but the old.

I think the same will apply here but will wait to see for sure.

[ferkel]

Best budget ever.. Dalton is the man! Too bad I never voted for him... the rest of you did

[f00kie]

I asked that earlier and it remains to be seen.

However, I don't believe they can retroact a tax on a completed purchase agreement. It is similar to when I purchased a new home. Rules were just changing for increased land transfer tax. My home closed after the change but I purchased the house prior to the change. The new and higher rates were not charged but the old.

I think the same will apply here but will wait to see for sure.

I didn't think you could actually close 14 months away. I know when we bought our house we closed after 5 months or so and that was considered a long time.

[onlineharvest]

I didn't think you could actually close 14 months away. I know when we bought our house we closed after 5 months or so and that was considered a long time.

14 Months is not unlikely. If you sign into a purchase agreement long before the house begins construction, it will take more than a year. I thought this was MORE common because of the nature of new home construction.

For instance, I closed in July 09 and purchased the house more than a year earlier. I purchased the house KNOWING the closing date. I've also had friends move into a property 18 months after signing the purchase agreement.

[EugW]

I signed my purchase agreement in the 20th century. It closed in the 21st century (over 2 years later). :)

My neighbours signed their purchase agreements 3 years prior. I was actually late to the party. :razz:

There was a strike that happened after work on the place began.

P.S. For go leafs, my purchase price did not include GST. It was charged extra.

[hamon]

Remember you need to declare this as income soo 1000 will be more like 700 after they remove their deductions :)

Thanks Mcguinty.

[dougjp]

Increased taxes on gasoline for our cars? And by how much? I don't get it, and the mainstream media fails us again as its not explained.

Ontario already takes 14.7 cents out of every liter in taxation, which my trusty calculator says is 17% taxation based on the current approximately 86 cents per liter price. So unless we are talking about a tax on a tax (isn't that a criminal act in any other country?), BOTH of which would be flowing to Dolt McSquinty's lemon sucking face, how does it work?

[speedyforme]

Ewwww.... :D

How about single people who do not get GST rebate? They never had any advantage and now they are being screwed over. Middle class single people seems to be the government's favorite target. Well, middle class couples as well, but less so.

That's me. And since they also said once you hit $80k per year, you get NOTHING. That's me in summer 2010, looks like this budget offers me NOTHING but a measy 1% income tax cut.

[Archanfel]

That's me. And since they also said once you hit $80k per year, you get NOTHING. That's me in summer 2010, looks like this budget offers me NOTHING but a measy 1% income tax cut.

Actually not even 1%. You got $200 something maximum and they introduced a new surtax to claw it back some. The report says the maximum clawback is $40, but I will have to see the tax form to believe it.

[mself084]

I asked that earlier and it remains to be seen.

However, I don't believe they can retroact a tax on a completed purchase agreement. It is similar to when I purchased a new home. Rules were just changing for increased land transfer tax. My home closed after the change but I purchased the house prior to the change. The new and higher rates were not charged but the old.

I think the same will apply here but will wait to see for sure.

Well, you aren't actually buying the house until closing day... that's what has me a bit worried. Your contract likely has something about them being able to transfer any outstanding taxes to you at closing to be paid then.

we close in jan 2010, and my house price did include GST in it.

[speedyforme]

Actually not even 1%. You got $200 something maximum and they introduced a new surtax to claw it back some. The report says the maximum clawback is $40, but I will have to see the tax form to believe it.

I didn't read up on the surtax thing.

Well sucks even more to be me...

[Archanfel]

I didn't read up on the surtax thing.

Well sucks even more to be me...

Try become a millionaire. The tax situation improves significantly then. :D

Stupid government.

[speedyforme]

Try become a millionaire. The tax situation improves significantly then. :D

Stupid government.

lol, I'm not that ambitious

[Bullseye]

The Finance Minister is saying that 93% of Ontarians will be better off once this is implemented, and at my first glance at this, I would have to agree.

Almost no one here has mentioned the reduction in the lowest tax rate by 1%. That affects almost everyone, with a $260-ish drop in annual taxes per person.

For us, that's over $40/month in extra net income. When I add up all the new things I'll now be paying 8% more on, it works out to just slightly less than $40/month. Then we get the one time $1000.

Obviously, there will be some losers here, but it looks like most will indeed be better off? What am I missing here, if not?

[dougjp]

The Finance Minister is saying that 93% of Ontarians will be better off once this is implemented, and at my first glance at this, I would have to agree.

Almost no one here has mentioned the reduction in the lowest tax rate by 1%. That affects almost everyone, with a $260-ish drop in annual taxes per person.

For us, that's over $40/month in extra net income. When I add up all the new things I'll now be paying 8% more on, it works out to just slightly less than $40/month. Then we get the one time $1000.

Obviously, there will be some losers here, but it looks like most will indeed be better off? What am I missing here, if not?

Not completely sure about this, however usually when its only the lowest tax rate that gets reduced, it affects almost nobody. If all tax rates are reduced by 1% then your calculations may be right.

[EugW]

The Finance Minister is saying that 93% of Ontarians will be better off once this is implemented, and at my first glance at this, I would have to agree.

Almost no one here has mentioned the reduction in the lowest tax rate by 1%. That affects almost everyone, with a $260-ish drop in annual taxes per person.

For us, that's over $40/month in extra net income. When I add up all the new things I'll now be paying 8% more on, it works out to just slightly less than $40/month. Then we get the one time $1000.

Obviously, there will be some losers here, but it looks like most will indeed be better off? What am I missing here, if not?
14 billion deficit in the first year, mainly due to increased spending.

[Archanfel]

The Finance Minister is saying that 93% of Ontarians will be better off once this is implemented, and at my first glance at this, I would have to agree.

Almost no one here has mentioned the reduction in the lowest tax rate by 1%. That affects almost everyone, with a $260-ish drop in annual taxes per person.

For us, that's over $40/month in extra net income. When I add up all the new things I'll now be paying 8% more on, it works out to just slightly less than $40/month. Then we get the one time $1000.

Obviously, there will be some losers here, but it looks like most will indeed be better off? What am I missing here, if not?

Apparently there's a new surtax to claw back the $260. Gas is going up, even MERs are going up by 15%. Take a $100,000 investment. At 2% MER rate, that alone is $300 alone. Since gas is going up, everything else will go up.

[Bullseye]

Not completely sure about this, however usually when its only the lowest tax rate that gets reduced, it affects almost nobody. If all tax rates are reduced by 1% then your calculations may be right.

We have a progressive tax system here, so a reduction in the lowest bracket affects all tax brackets all the way up.

[Bullseye]

Apparently there's a new surtax to claw back the $260. Gas is going up, even MERs are going up by 15%. Take a $100,000 investment. At 2% MER rate, that alone is $300 alone. Since gas is going up, everything else will go up.

I didn't see anything about this surtax (again, I only did a quick read of the budget), can you please elaborate?

I'm guessing it likely only affects very high income earners? If so, that would still leave most people ahead, correct?

[speedyforme]

Did they raise personal basic income level or did they rase the 1st tax bracket?

I read that auto incurance won't be charged PST...is this correct?

[Archanfel]

I didn't see anything about this surtax (again, I only did a quick read of the budget), can you please elaborate?

I'm guessing it likely only affects very high income earners? If so, that would still leave most people ahead, correct?

Current (2009) Proposed (2010)1
20% surtax Basic Ontario Tax > $4,257 Basic Ontario Tax > $3,978
36% surtax Basic Ontario Tax > $5,370 Basic Ontario Tax > $5,091

Depending on how you define "very high income earners".

[83_gemini]

The lowest provincial tax bracket was cut.

[intellin_96]

Well, you aren't actually buying the house until closing day... that's what has me a bit worried. Your contract likely has something about them being able to transfer any outstanding taxes to you at closing to be paid then.

we close in jan 2010, and my house price did include GST in it.

Just called Budget Public Inquiry, they said the transaction happens on the closing date when you pay the full amount. so it would be subjected to the new single "harmonized" tax. They also said this is not finalized yet since the budget hasn't passed. They said no when I asked if they have any publication which clearly explain this.

This is really a basic and critical question. But surprisingly not being clearly answered. I bet all the new home builders are being asked by their clients too. Hopefully they will push for an answer. To avoid being taxed a huge amount (for new homes over 500000) surprisingly on the closing date, you better make sure the new house gets closed before July 1, 2010.

[speedyforme]

Current (2009) Proposed (2010)1
20% surtax Basic Ontario Tax > $4,257 Basic Ontario Tax > $3,978
36% surtax Basic Ontario Tax > $5,370 Basic Ontario Tax > $5,091

Depending on how you define "very high income earners".

I don't get this...:confused:

[Archanfel]

I don't get this...:confused:

They lower the threshold where you have to surtax from 4257 to 3978. It's actually not as bad as I thought.

[don242]

I didn't see anything about this surtax (again, I only did a quick read of the budget), can you please elaborate?

I'm guessing it likely only affects very high income earners? If so, that would still leave most people ahead, correct?

Not sure either about the surtax thing. Can't find the exact information yet, but I do remember seeing that after this surtax and the income tax cut, it would work out to $150 tax break (can't confirm this yet).

At this point I still see this as a net loss on my side for the taxes over time. I still would need to get a better grasp on what is happening.

Bottom line, liberals have increased taxes last time with the health premium (which isn't a tax???) and now again with the HST (somehow a tax break). Yet somehow people want to vote them in (another discussion).

[Archanfel]

Not sure either about the surtax thing. Can't find the exact information yet, but I do remember seeing that after this surtax and the income tax cut, it would work out to $150 tax break (can't confirm this yet).

At this point I still see this as a net loss on my side for the taxes over time. I still would need to get a better grasp on what is happening.

Bottom line, liberals have increased taxes last time with the health premium (which isn't a tax???) and now again with the HST (somehow a tax break). Yet somehow people want to vote them in (another discussion).

That's why I am increasingly cynical about this whole democracy thing. The politicians keep using the money of a group of people to pay another group. Not that I can think of a better form of government.

[speedyforme]

can someone explain what a surtax is actually?

[coldpower27]

The rule of thumb for buying a used car is 20,000 a year. If somebody has a 10 years old car that only has 50,000 on it, don't take it as a good thing because it's likely driven exclusively on local.

I don't understand why is that a bad thing???

[intellin_96]

can someone explain what a surtax is actually?

TAX on TAX. Surtax is charged when your tax payable exceeds certain thresholds.

[speedyforme]

TAX on TAX. Surtax is charged when your tax payable exceeds certain thresholds.

why would they tax tax? sounds stupid

[speedyforme]

I don't understand why is that a bad thing???

something about emmissions and the life of the engine I think

[ES_Revenge]

why would they tax tax? sounds stupid
Why hello! Welcome to Canada, we hope you enjoy your stay :D

As for the HST, HST blows goats!!! :mad:

A question about this $1000 rebate for "families"... Does that mean if I don't have a wife and/or kids, I won't be getting it?

I'm not usually one to condone violence but honestly the members of the Liberal party that decided on this garbage need to be beaten, severely.

[speedyforme]

Why hello! Welcome to Canada, we hope you enjoy your stay :D

As for the HST, HST blows goats!!! :mad:

A question about this $1000 rebate for "families"... Does that mean if I don't have a wife and/or kids, I won't be getting it?

I'm not usually one to condone violence but honestly the members of the Liberal party that decided on this garbage need to be beaten, severely.

I don't think I've ever been informed about this surtax stuff. New to me, lol

Anyway, as singles who make over $80k next year, we are f*cked for having a family.

[tsatsa]

Why hello! Welcome to Canada, we hope you enjoy your stay :D

As for the HST, HST blows goats!!! :mad:

A question about this $1000 rebate for "families"... Does that mean if I don't have a wife and/or kids, I won't be getting it?

I'm not usually one to condone violence but honestly the members of the Liberal party that decided on this garbage need to be beaten, severely.

I think you will get $300.

[speedyforme]

I won't comment on the HST because all the implications are not aware to me.

I just dislike how they keep punishing individuals and other groups more and more.

I mean at least the HST affects everyone.

[onlineharvest]

Well, you aren't actually buying the house until closing day... that's what has me a bit worried. Your contract likely has something about them being able to transfer any outstanding taxes to you at closing to be paid then.

we close in jan 2010, and my house price did include GST in it.

But that is what a purchase agreement is for. When house pricing was on the rise, if you purchased your home 2 years prior to construction and occupancy, you paid what you agreed when it was signed.

I can't see how the gov't can retroact this arrangement and make it apply to even older purchase agreements. That doesn't make sense. And since the new land transfer charges didn't work that way, I'd expect the same.

Your house didn't include GST? How do you know? Most house pricing on the market is the cost with GST. I didn't know what the price of my house was before taxes until I closed. I'd double-check with your sales office and make sure they will not charge you more if the new charges do not apply.

[onlineharvest]

Just called Budget Public Inquiry, they said the transaction happens on the closing date when you pay the full amount. so it would be subjected to the new single "harmonized" tax. They also said this is not finalized yet since the budget hasn't passed. They said no when I asked if they have any publication which clearly explain this.

This is really a basic and critical question. But surprisingly not being clearly answered. I bet all the new home builders are being asked by their clients too. Hopefully they will push for an answer. To avoid being taxed a huge amount (for new homes over 500000) surprisingly on the closing date, you better make sure the new house gets closed before July 1, 2010.

I can't see how that is true. It has to depend on the purchase agreement.

If what you said was true, a simple delay in construction could mean 8% more in the purchase price. What then is the purpose of a purchase agreement when the price is allowed to changed that drastically? And a delay in construction is not unlikely.

The purchase agreement (most from what I've seen) includes the taxes also.

[ferkel]

This is Canada. If you're not complaining.. you're not getting taxed enough.
I'm pretty sure the GST will need to be raised the missing 2% soon.

[mself084]

But that is what a purchase agreement is for. When house pricing was on the rise, if you purchased your home 2 years prior to construction and occupancy, you paid what you agreed when it was signed.

I can't see how the gov't can retroact this arrangement and make it apply to even older purchase agreements. That doesn't make sense. And since the new land transfer charges didn't work that way, I'd expect the same.

Your house didn't include GST? How do you know? Most house pricing on the market is the cost with GST. I didn't know what the price of my house was before taxes until I closed. I'd double-check with your sales office and make sure they will not charge you more if the new charges do not apply.

My house DID include GST... that's what i wrote :)

check your contract, tho - the contract is there to protect the builder... i know ours has a clause about passing on municipal fees, taxes, etc to us if there are any extra ones. i emailed my builder to find out about this HST stuff.

And I'm with you on this - i sincerely hope the price we signed for is the final price...we close 6 months before this comes into effect (well, if it's on time, which is likely won't be) but i know lots of others with closing dates in the fall and summer.

[cutesnoopydoll]

I thought that I can move out of Toronto (because of our Mayor), now do I have to move out of Ontario because of this budget?!??!!

[commie]

Does this HST on >$400,000 include resale homes and how does that impact the resale homes?

We are looking at moving into something bigger from our current house, and the price point is in the $550,000 range...
It would really suck to have to pay the new taxes on it....
This budget does nothing for me, if anything i am worse off by it...don't qualify for the $1000, need to pay more taxes on the house, more taxes for items that weren't PST before..

shiat, Dalton, what has the upper middle class done to you?

[rems]

But that is what a purchase agreement is for. When house pricing was on the rise, if you purchased your home 2 years prior to construction and occupancy, you paid what you agreed when it was signed.

I can't see how the gov't can retroact this arrangement and make it apply to even older purchase agreements. That doesn't make sense. And since the new land transfer charges didn't work that way, I'd expect the same.

Your house didn't include GST? How do you know? Most house pricing on the market is the cost with GST. I didn't know what the price of my house was before taxes until I closed. I'd double-check with your sales office and make sure they will not charge you more if the new charges do not apply.

I think the problem arises when the price you agreed to states it includes GST. I don't know if it says it includes all taxes. If it's just GST then I can see how they can add the difference.

[pennywize]

Does this HST on >$400,000 include resale homes and how does that impact the resale homes?

We are looking at moving into something bigger from our current house, and the price point is in the $550,000 range...
It would really suck to have to pay the new taxes on it....
This budget does nothing for me, if anything i am worse off by it...don't qualify for the $1000, need to pay more taxes on the house, more taxes for items that weren't PST before..

shiat, Dalton, what has the upper middle class done to you?

We don't pay PST or GST on resale homes (unless part of that home is used to run a business). So I would think this HST won't affect resale homes.

[intellin_96]

I can't see how that is true. It has to depend on the purchase agreement.

If what you said was true, a simple delay in construction could mean 8% more in the purchase price. What then is the purpose of a purchase agreement when the price is allowed to changed that drastically? And a delay in construction is not unlikely.

The purchase agreement (most from what I've seen) includes the taxes also.

I totally agree that the date you signed the purchase agreement should be used to determine if HST apply or not. But what they told me is different. It is possible that they themselves are not very clear yet. You can call Public Inquires to clarify.

Most purchase agreements clearly specify the tax included in purchase price is G.S.T, other unforeseen tax or levy will be purchaser's responsibility.

[taxguru]

What is this going to do for cross provincial mail-order? Right now NCIX orders to Ontario do not pay PST. Will they need to pay harmonized seeing as it is federal? How about orders going from Ontario to another province?

NCIX charges the 13% HST on shipments to NB, NS & NL. I suspect that Ontario will just adopt the 13% HST regime like those Atlantic provinces, (subject to its own POS rebates for books etc. to eliminate the extra 8% on certain items at the cash register) This means NCIX will start charging 13% HST on shipments to Ontario as well starting July 1, 2010.

[thelefteyeguy]

I totally agree that the date you signed the purchase agreement should be used to determine if HST apply or not. But what they told me is different. It is possible that they themselves are not very clear yet. You can call Public Inquires to clarify.

Most purchase agreements clearly specify the tax included in purchase price is G.S.T, other unforeseen tax or levy will be purchaser's responsibility.

+1...the contract is always written to protect the Builder. If PST needs to be paid...count on the homeowner to be screwed

[Ninster]

We don't pay PST or GST on resale homes (unless part of that home is used to run a business). So I would think this HST won't affect resale homes.

Won't effect resale home but, the cost of real estate commission (biggie), lawyer fees, house inspection fees will all go up 8%.

Real estate commission is the big one.

If you are selling a 500K house and the real estate commission is usually around 5% (25k). You will now be an extra 8% ($2,000) in tax on the commission.

[onlineharvest]

My house DID include GST... that's what i wrote :)

check your contract, tho - the contract is there to protect the builder... i know ours has a clause about passing on municipal fees, taxes, etc to us if there are any extra ones. i emailed my builder to find out about this HST stuff.

And I'm with you on this - i sincerely hope the price we signed for is the final price...we close 6 months before this comes into effect (well, if it's on time, which is likely won't be) but i know lots of others with closing dates in the fall and summer.

You have the right idea. I would even recommend, if possible, getting something in writing from sales that even if it does close after this new tax takes effect, you will still only pay the agreed purchase price.

I sure hope we get an answer on this question from a real estate agent or association.

[thelefteyeguy]

You have the right idea. I would even recommend, if possible, getting something in writing from sales that even if it does close after this new tax takes effect, you will still only pay the agreed purchase price.

I sure hope we get an answer on this question from a real estate agent or association.

....the contract likely already stipulates that all other taxes is not the responsibility of the builder ;)

an example is the education levy tax...sometimes it's charge, sometimes it's not...but if it is...the homeowner eats it

[onlineharvest]

We don't pay PST or GST on resale homes (unless part of that home is used to run a business). So I would think this HST won't affect resale homes.

Well, not the price per se, but it will affect:

Real estate agent commissions
Closing costs
Inspections
Etc...

These can and run into the 10s of thousands so an extra 8% is not chump change.

[onlineharvest]

....the contract likely already stipulates that all other taxes is not the responsibility of the builder ;)

an example is the education levy tax...sometimes it's charge, sometimes it's not...but if it is...the homeowner eats it

Well, you can see how complicated this matter will become unless we have an answer from an association.

Imagine you house is schedule to close 1 month before this HST comes into effect. And what if it is delayed 1 more month, or 2. Just because of the delay (not your fault), on say a $500,000 new home your purchase price has just increased 8%?

That doesn't sound kosher to me.

[thelefteyeguy]

Well, you can see how complicated this matter will become unless we have an answer from an association.

Imagine you house is schedule to close 1 month before this HST comes into effect. And what if it is delayed 1 more month, or 2. Just because of the delay (not your fault), on say a $500,000 new home your purchase price has just increased 8%?

That doesn't sound kosher to me.

you can try suing for the delay ...Tarion has a maximum of $5k. If the tax is collectible from the govt...someones going to pay.

"If the homeowner submits a Delayed Closing Form together with all receipts, he/she may be able to claim up to $100 per day in living expenses (such as temporary accommodation costs), plus other direct costs caused by the delay (such as extra moving and storage costs), up to a maximum of $5,000. "

[onlineharvest]

you can try suing for the delay ...Tarion has a maximum of $5k. If the tax is collectible from the govt...someones going to pay.

"If the homeowner submits a Delayed Closing Form together with all receipts, he/she may be able to claim up to $100 per day in living expenses (such as temporary accommodation costs), plus other direct costs caused by the delay (such as extra moving and storage costs), up to a maximum of $5,000. "

I don't know, I still don't think they will retroact taxes on a signed purchase agreement.

I'm in sales and if you made a purchase for an item on a date but the item was backordered, you will pay the amount and taxes based on the agreement for that particular item - even though the 'delivery' of the item happens after a change (e.g., tax rate). I don't see how that is different here.

But who am I kidding. Even if I am wrong do I expect the gov't to do what makes sense? Let's hope they do on this case for all those home buyers of new properties who will be affected if they can retroact the taxes.

[AllWheelDrift]

I don't know, I still don't think they will retroact taxes on a signed purchase agreement.

I'm in sales and if you made a purchase for an item on a date but the item was backordered, you will pay the amount and taxes based on the agreement for that particular item - even though the 'delivery' of the item happens after a change (e.g., tax rate). I don't see how that is different here.

But who am I kidding. Even if I am wrong do I expect the gov't to do what makes sense? Let's hope they do on this case for all those home buyers of new properties who will be affected if they can retroact the taxes.
Well, when the GST was dropped, everyone was scrambling to get their GST refunded on purchase agreements they'd entered but that hadn't closed yet. I'm sure if we were talking about a drop in the tax rate you'd be arguing what should matter is the tax rate at closing since before then it's just an agreement to make a transaction in the future and what really matters is what the law is when the transaction happens.

People always want to have their cake and eat it too. :lol:

[onlineharvest]

Well, when the GST was dropped, everyone was scrambling to get their GST refunded on purchase agreements they'd entered but that hadn't closed yet. I'm sure if we were talking about a drop in the tax rate you'd be arguing what should matter is the tax rate at closing since before then it's just an agreement to make a transaction in the future and what really matters is what the law is when the transaction happens.

People always want to have their cake and eat it too. :lol:

What's the point of cake if we can't eat it!? :razz:

[HighFlyer]

Don't know if this has been discussed (couldn't do a search on 'MER'), but the HST could have a big impact on investment returns.....

Higher Tax = Higher MER

If the new Ontario HST passes and financial services are subject to this new HST any mutual fund company resident in Ontario would need to increase the sales tax charged on its management fee from 5% to 13%. This means that the mutual funds management expense ratios or MERs will increase.

The MER charged to the mutual fund actually reduces the overall return of the fund which is why it’s important to pay attention to MERs on mutual funds. So when MERs increase the net investment return to investors goes down.

An Example

Here is an example. A particular mutual fund has an MER of 2% which includes the current 5% GST and has a gross investment return of 9%. The return on the investment the investor will see is 7%. If the HST is applied, the MER increases to 2.15% and the net return to the investor goes down to 6.85%.
Quantifying The Impact

So the MER went up, what does this mean in real dollar terms? If you invested $5,000 per year in this mutual fund inside a registered account (RRSP, RRIF, TFSA etc.), after 10 years your investments would be worth $625 less. After 25 years $8,000 less and after 35 years, $25,000.

http://blog.taxresource.ca/ontarios-proposed-hst-may-impact-all-canadians

[AllWheelDrift]

Don't know if this has been discussed (couldn't do a search on 'MER'), but the HST could have a big impact on investment returns.....

http://blog.taxresource.ca/ontarios-proposed-hst-may-impact-all-canadians
Yeah, it'll make picking low MER funds that much more important. I read an article by some investment company claiming that it would result in $52 more in taxes/year on a $20k account. Of course, I calculated backwards and concluded they were charging an outrageous 3% MER (in which case you're already losing $600 to the MER.)

On something like a TD eFund it would bump the MER from .31% to .33% which would be $4/year on a $20k account.

[HighFlyer]

Yup, it only works out to $13.60 per year on $100,000 invested in XIU, but $200 per year on a 2.5% MER.

[netriones]

Dumb question, will grocery be charged HST?
When do people get $1000 pay cheque?

[go leafs]

Dumb question, will grocery be charged HST?

Basic groceries will still be exempt
Anything that's charged GST + PST now will be charged HST

[Drew_W]

Ontario should work on an economic stimulus package, not give out a ton of money in the short term to be spent on ANYTHING, only to end up GOUGING taxpayers in the long run...

[konfusion666]

Yeah, it'll make picking low MER funds that much more important. I read an article by some investment company claiming that it would result in $52 more in taxes/year on a $20k account. Of course, I calculated backwards and concluded they were charging an outrageous 3% MER (in which case you're already losing $600 to the MER.)

On something like a TD eFund it would bump the MER from .31% to .33% which would be $4/year on a $20k account.

Or just go after mutual funds offered by companies which are not resident in Ontario. Isn't PH&N based out of Vancouver?

BTW, the Big 5 banks are federally regulated, which implies they are federally incorporated, so perhaps their MF divisions aren't affected either.

[onlineharvest]

When do people get $1000 pay cheque?

You will get the $1000 in 3 separate cheques next year I believe.

[HughG]

Do we still get GST cheques every 3 months ?

[konfusion666]

Do we still get GST cheques every 3 months ?

Those come from the Federal Government so I assume that you will still get them.

[tjthemanto]

You will get the $1000 in 3 separate cheques next year I believe.

The HST starts on July 1 st , 2010 .

Families earning less than $ 160 K will get $1,000 rebate in 3 separate installments.

Single Person earning less than $ 80 K will only get $ 300 in 3 Separate installments.

Due Dates for the 3 Installments is below :

First Installment : June 30 , 2010

Second Installment : Dec 31 , 2010

Third Installment : June 30 , 2011 .

So basically they are going to take 18 months to pay that money that too starting next year in June 30 , 2010 which itself is 15 months away !

So we are going to wait for 33 months from today for all the 3 cheques to arrive !!!

[tjthemanto]

Those come from the Federal Government so I assume that you will still get them.

Yeah you will still get them every 3 months . They are not related to the HST rebate.

The HST rebate is a ONE TIME payment over 3 installments . Its not a recurring payment .

Once you get the $1,000 for families or $ 300 for a single person over 3 installments on June 30 ( 2010 ) ; December 31 ( 2010 ) and June 30 (2011) , that's all there is going to be.

No more rebates after the intial $ 1,000 or $300 .

[tjthemanto]

Why hello! Welcome to Canada, we hope you enjoy your stay :D

As for the HST, HST blows goats!!! :mad:

A question about this $1000 rebate for "families"... Does that mean if I don't have a wife and/or kids, I won't be getting it?

I'm not usually one to condone violence but honestly the members of the Liberal party that decided on this garbage need to be beaten, severely.

You will get $ 300 only if you are a single person & earning less than $ 80 K/yr.

[tjthemanto]

The HST starts on July 1 st , 2010 .

Families earning less than $ 160 K will get $1,000 rebate in 3 separate installments.

Single Person earning less than $ 80 K will only get $ 300 in 3 Separate installments.

Due Dates for the 3 Installments is below :

First Installment : June 30 , 2010

Second Installment : Dec 31 , 2010

Third Installment : June 30 , 2011 .

So basically they are going to take 18 months to pay that money that too starting next year in June 30 , 2010 which itself is 15 months away !

So we are going to wait for 33 months from today for all the 3 cheques to arrive !!!

There is a Ontario Provincial Election in October , 2011 .

Did you see how the last ( 3rd ) HST rebate installment is conveniently scheduled for June 30 ,2011 just 3 months before the elections to buy votes for the Liberals.

[speedyforme]

I'll be over $80k by next summer so I am screwed, unless I get married to someone who makes less...

:razz:

[gman]

There is a Ontario Provincial Election in October , 2011 .

Did you see how the last ( 3rd ) HST rebate installment is conveniently scheduled for June 30 ,2011 just 3 months before the elections to buy votes for the Liberals.

Actually, it is not exactly convenient. If they really want to do that right, that should be done in October or even later. 3 months is a very long time for any Canadian election (US election is different story). After 3 months, anybody who likes that cheque will not remember the benefit. Those who hates this cheque will for sure remember.

Also, buying vote is to promise something in the future and not something in the past. Changing government will not make you lose the benefit you already received.

[intellin_96]

Write to your MPP about your concerns if you would like to stop this tax grab. There is still a chance to prevent this from happening. It is still not approved by the Ontario Legislature yet.

If you need contact info of your MPP, here is the link:
http://www.ontla.on.ca/web/members/member_addresses.do?locale=en

[gman]

Write to your MPP about your concerns if you would like to stop this tax grab. There is still a chance to prevent this from happening. It is still not approved by the Ontario Legislature yet.

If you need contact info of your MPP, here is the link:
http://www.ontla.on.ca/web/members/member_addresses.do?locale=en

It is now too late. I wrote that to my MPP before the budget is presented.

Liberals has a majority government. If the budget is not passed, the government will be taken down and have an election. Do you think your Liberals MPP will take their party down? I don't think so. Some Liberals MPP may do some symbolic rebellion votes that will not change the outcome. That is the most we can expect.

[intellin_96]

It is now too late. I wrote that to my MPP before the budget is presented.

Liberals has a majority government. If the budget is not passed, the government will be taken down and have an election. Do you think your Liberals MPP will take their party down? I don't think so. Some Liberals MPP may do some symbolic rebellion votes that will not change the outcome. That is the most we can expect.

I hope MPPs ask for amendments.

[trenton1776]

Currently, used car sales in Ontario are subject to PST only. In theory under HST where the rules follow the GST there should be no tax at all.


There is a widely quoted stat that after HST in the maritime provinces taxes doubled on many items including 'privately sold used vehicles.' A bit of research shows this has nothing to do with the HST, but rather provinces such as New Brunswick impose their own provincial vehicle tax (PVT) on private sales.

Will Ontario go the same route, or will private vehicle sales be one of the few areas consumers will actually gain from HST?

[go leafs]

"Private Transfers of Motor Vehicles

Similar to the tax treatment in other provinces, Ontario would retain a sales tax on private transfers of used motor vehicles. This would help to ensure a level playing field between used vehicles sold through dealerships and private sales."

[trenton1776]

"Private Transfers of Motor Vehicles

Similar to the tax treatment in other provinces, Ontario would retain a sales tax on private transfers of used motor vehicles. This would help to ensure a level playing field between used vehicles sold through dealerships and private sales."

How much would that be? "Level playing field" implies it will be at 13% when its currently at 8%. So this too will increase?

[EugW]

Cheaper booze after tax harmonization? Think again (http://www.thestar.com/News/Ontario/article/611080)

Ontario is refusing to lower its levies on alcohol as it moves towards tax harmonization and may also increase the cost of buying a privately sold used car.

Under its deal with Ottawa, Ontario is supposed to standardize its eight per cent provincial tax on products and services as it merges the PST with the five per cent federal GST.

Although alcohol taxes should come down under the merged tax, the government will add new fees to make up the difference when the blended tax takes effect next year.

A government spokesperson says the fees on alcohol will ensure social responsibility.

[Boshuda]

Yes. 2 people earning a total of $158k, $79k each, pay about double what a single earning $79k pays.

And a family with one earner making $158k and the other making $0 will pay way more than 2 earners making $79k each. Families are punished for instance, for raising your own children.

Singles have it best.

I'm a little late chiming in, but I have to say that singles have it best with taxes. The only exception is if your spouse is a dependent.

Just to give you an example from my own experience.

Prior to getting married I paid about 450$ a month in rent and utilities. When filing my taxes, I would pay nothing after tuition and rent tax credits (when I said I paid no income tax I mean 0$ total). I also qualified for the GST rebate. My wife, who makes the same as I do, had the same tax return I just described.

After we got married, we no longer qualified for the GST rebate, we could no longer get a tax credit on our rent. We ended up paying about 500$ in taxes. Also keep in mind that my monthly budget for rent and utilities almost doubled.

So in summary, as singles we got about 400$ annually from the government. After getting married we were paying the government about 500$ annually.

So as I said above, there are no tax advantages to being married unless your spouse makes little to no money. In that event you can transfer some of your earnings to your spouse. This can make a huge impact if it puts you in a lower tax bracket.


Regarding the HST, I found this thread while looking for information on the 1000$ payout. It seems that nobody on this thread will take up the ass like I will. My wife and I are moving out of the country to do a brief fellowship (~3 years) with all intentions of moving back. So from what I have read we will not qualify for the 1000$ rebate, but we get to enjoy the HST when we return and plan on buying a home. Hell if I am getting screwed anyways, I'd at least be happier with an extra 1000$ in my pocket.

[tkl]

Has anybody read anything on whether CONDO fees will be tacked on another 8% or 5 %, whichever one we're not paying now ?

I would be so royally pissed if it was.

[agent86]

Yes. Since a condo must absorb all GST & PST in its budget, and it must pass on its cost to all condo owners, condo fees will go up by 2.5% (5% x 1/2 year) in 2010 just to cover the additional HST and by another 2.5% in 2011 (covering the whole 5%). And that's before any before tax price increases.

[ShopSmart]

I'm a little late chiming in, but I have to say that singles have it best with taxes. The only exception is if your spouse is a dependent.

Just to give you an example from my own experience.

Prior to getting married I paid about 450$ a month in rent and utilities. When filing my taxes, I would pay nothing after tuition and rent tax credits (when I said I paid no income tax I mean 0$ total). I also qualified for the GST rebate. My wife, who makes the same as I do, had the same tax return I just described.

After we got married, we no longer qualified for the GST rebate, we could no longer get a tax credit on our rent. We ended up paying about 500$ in taxes. Also keep in mind that my monthly budget for rent and utilities almost doubled.

So in summary, as singles we got about 400$ annually from the government. After getting married we were paying the government about 500$ annually.

So as I said above, there are no tax advantages to being married unless your spouse makes little to no money. In that event you can transfer some of your earnings to your spouse. This can make a huge impact if it puts you in a lower tax bracket.

Regarding the HST, I found this thread while looking for information on the 1000$ payout. It seems that nobody on this thread will take up the ass like I will. My wife and I are moving out of the country to do a brief fellowship (~3 years) with all intentions of moving back. So from what I have read we will not qualify for the 1000$ rebate, but we get to enjoy the HST when we return and plan on buying a home. Hell if I am getting screwed anyways, I'd at least be happier with an extra 1000$ in my pocket.

I find it a bit disturbing that someone is complaining "taking it up the ass" for paying $500 in taxes. We would all be happier with an extra $1000 in our pockets but the reality is that we live in a country with free health care and education, with relative peace and democracy. It's not a perfect system by any means but come on....$500 in taxes you're paying? That's it??

It's not true that singles are treated better by the government or even in general - there are huge incentives to being married when you have kids and this is where singles are at a huge disadvantage. There are numerous tax credits, bonuses (baby), RESP grants, etc. The government rewards people who have children and punishes singles. Singles are at a distinct disadvantage for estates purposes for RSPs, RIFs, etc. They can allocate these assets to their spouse without going to probate but singles can't select someone to do the same.

Singles pay taxes for schools and for $80K/year teachers and their pensions, as well as free health and care for children, and they also get screwed when couples take paternal or maternity leave through their work. A single person doesn't get to take a year off of paid leave ever.

Married couples + kids use up much more benefits if they have dual health care plans through work. Singles can't usually claim anyone else except themselves even if they're caring for a parent or sibling.

BTW for the HST if it passes, singles are only entitled to $300 max not $1000.

Married couples choose to live together and typically share utilities, house payments, etc.

GST credits are based on income so even if you're single and earning over $39,875, you also get nothing from the government.

[don242]

I find it a bit disturbing that someone is complaining "taking it up the ass" for paying $500 in taxes. We would all be happier with an extra $1000 in our pockets but the reality is that we live in a country with free health care and education, with relative peace and democracy. It's not a perfect system by any means but come on....$500 in taxes you're paying? That's it??

It's not true that singles are treated better by the government or even in general - there are huge incentives to being married when you have kids and this is where singles are at a huge disadvantage. There are numerous tax credits, bonuses (baby), RESP grants, etc. The government rewards people who have children and punishes singles. Singles are at a distinct disadvantage for estates purposes for RSPs, RIFs, etc. They can allocate these assets to their spouse without going to probate but singles can't select someone to do the same.

Singles pay taxes for schools and for $80K/year teachers and their pensions, as well as free health and care for children, and they also get screwed when couples take paternal or maternity leave through their work. A single person doesn't get to take a year off of paid leave ever.

Married couples + kids use up much more benefits if they have dual health care plans through work. Singles can't usually claim anyone else except themselves even if they're caring for a parent or sibling.

BTW for the HST if it passes, singles are only entitled to $300 max not $1000.

Married couples choose to live together and typically share utilities, house payments, etc.

GST credits are based on income so even if you're single and earning over $39,875, you also get nothing from the government.

And when you are old and requiring healthcare more than a younger person you will be glad you helped support all those couples with children who are then taking care of you and paying their taxes to cover your pension.

Social programs are part of any country. People complain about immigration on one side, then complain that their tax dollars are being dished out to children born in the country on the other.

There are benefits to being a couple and there are benefits to being single. Having to take care of children 24/7 is a blessing but at the same time isn't always an easy task.

Sorry, a little off topic.

[speedyforme]

And when you are old and requiring healthcare more than a younger person you will be glad you helped support all those couples with children who are then taking care of you and paying their taxes to cover your pension.

Social programs are part of any country. People complain about immigration on one side, then complain that their tax dollars are being dished out to children born in the country on the other.

There are benefits to being a couple and there are benefits to being single. Having to take care of children 24/7 is a blessing but at the same time isn't always an easy task.

But that like saying I supported 5 children who in turn will support 1 person...

Either way, as a single, I won't see a dime in all of this except putting more money out. I won't even qualify for the $300.

[don242]

But that like saying I supported 5 children who in turn will support 1 person...

Either way, as a single, I won't see a dime in all of this except putting more money out. I won't even qualify for the $300.

You plan on using the services of only one person throughout your life? Geez, I hope that there are plenty of well educated children who grow up in all areas of expertise. Takes more than one child to keep the country running.

I do agree though it seems in some ways the single person gets shafted. However, it is based on a formula like everything else in taxes and rebates, etc. I certainly don't qualify for many things that others qualify for.

Let's see, a single person gets $300, my family of 4 gets $1000, I think we are being shafted, thats only $250 a person (singles have it made). Sure my kids don't directly pay taxes but indirectly the parents are paying the sales tax for everything we have to purchase for the kids. There is always a way to turn the argument to make it sound unfair for someone.

Trust me, someday when you are no longer single, you will probably change your tune when you look at it from the other side. The best you can do is try to manage your taxes each year through proper tax planning.

[Jungle]

Does anyone know exactly the terms of who qualifies for the $1000 cash back? For example, is it common law, married, fiance? Conjucal relationship?
(Sorry about the spelling.)

[mgronqui]

Here's a great article analyzing the tax harmonization from a tax specialist's perspective: http://tinyurl.com/c7bdsx

[holzwo]

I find it a bit disturbing that someone is complaining "taking it up the ass" for paying $500 in taxes. We would all be happier with an extra $1000 in our pockets but the reality is that we live in a country with free health care and education, with relative peace and democracy. It's not a perfect system by any means but come on....$500 in taxes you're paying? That's it??.
I have worked out my expenses and my Family 2 kids included will pay way more in on year than $1000. I would much rather not take the $1000 BRIBE from the governement. I angers me people are so stupid to argue over the $1000. I have 4 peoples expenses I will be paying 8% for 4 people.


It's not true that singles are treated better by the government or even in general - there are huge incentives to being married when you have kids and this is where singles are at a huge disadvantage. There are numerous tax credits, bonuses (baby), RESP grants, etc. The government rewards people who have children and punishes singles. Singles are at a distinct disadvantage for estates purposes for RSPs, RIFs, etc. They can allocate these assets to their spouse without going to probate but singles can't select someone to do the same. .
Couples create the next generation of tax payer. Why do you think they give these child benefits. Who pay for singles health care and pensions as they grow older.


Singles pay taxes for schools and for $80K/year teachers and their pensions, as well as free health and care for children, and they also get screwed when couples take paternal or maternity leave through their work. A single person doesn't get to take a year off of paid leave ever.

Married couples + kids use up much more benefits if they have dual health care plans through work. Singles can't usually claim anyone else except themselves even if they're caring for a parent or sibling.

BTW for the HST if it passes, singles are only entitled to $300 max not $1000. .
Could not agree more give me $300 for every person in my house. $300 for me my wife and my two kids that is $1200. Whose getting screwed now.

Married couples choose to live together and typically share utilities, house payments, etc.

GST credits are based on income so even if you're single and earning over $39,875, you also get nothing from the government.
I know it is a choice but my family of four over our life will pay 4 times your taxes!

[holzwo]

But that like saying I supported 5 children who in turn will support 1 person...

Either way, as a single, I won't see a dime in all of this except putting more money out. I won't even qualify for the $300.

Its a BRIBE so you don't see the big picture. I can't believe people can't see these three payments disbursed within 6 months of a provincial election are a bribe. I will bet they actually did focus groups to see how much it would take to distract people from the screwing they will take. We should be marching down to queenspark and not letting this happen instead people are whining over who gets the bigger bribe. Mcguinty is nothing more than a con man in my opinion. I will give you $300 or a $1000 to take 10 times that off you over the next 5 years. AND WE TAKE IT WITH A SMILE!

[speedyforme]

Its a BRIBE so you don't see the big picture. I can't believe people can't see these three payments disbursed within 6 months of a provincial election are a bribe. I will bet they actually did focus groups to see how much it would take to distract people from the screwing they will take. We should be marching down to queenspark and not letting this happen instead people are whining over who gets the bigger bribe. Mcguinty is nothing more than a con man in my opinion. I will give you $300 or a $1000 to take 10 times that off you over the next 5 years. AND WE TAKE IT WITH A SMILE!

I'm not saying it's not a bribe, it obviously is a bribe but still, I am NOT even getting bribed!

PS: when getting quotes for contractors, they only add GST (interlocking or granite countertops), does this mean that the harmonization will make them have to add PST and GST?

[HighFlyer]

PS: when getting quotes for contractors, they only add GST (interlocking or granite countertops), does this mean that the harmonization will make them have to add PST and GST?

yes.

[speedyforme]

yes.

Yikes, luckily I am getting this stuff done this year to take advantage of the renovation credit...