Toronto, Ontario, October 27, 2010 –
The Ontario Real Estate Association (OREA) and released today reveals that
fully 56 percent of Ontarians mistakenly believe that the new Harmonized Sales
Tax (HST) applies to the full purchase price of a resale home. In fact the HST is
only levied on the various transaction fees associated with the purchase of a
home that has been previously occupied (i.e. not a newly-built home).
Currently, the average price of an Ontario resale home is around $330,000.
Therefore, this confusion leaves the majority of Ontarians wrongly believing
that the HST will add more than $40,000 to the transaction cost. There is
growing concern among real estate professionals that this misperception about
the HST is dampening the Ontario housing market.
“We see it on the front lines every day. Clearly, Ontarians still don’t know
what the HST covers and what is exempt,” noted Dorothy Mason, President of
OREA. “This is not helping the housing market, and it’s not helping the Ontario
economy. This confusion means that many buyers think the cost of a resale
home is tens of thousands of dollars higher than it actually is.”
The results of the survey conducted earlier this month were consistent across
all age groups. However, there were some differences across other
demographic categories. For instance, of those surveyed half of the university
graduates, 71 percent of northern Ontarians, 59 percent of those living in
eastern and southwestern Ontario, and 54 percent of GTA residents all
mistakenly believe the HST applies to the full purchase price of resale homes.
“We’re doing our part to inform our clients, but we shouldn’t have to do it
alone. We’re calling on the Ontario government to launch an immediate public
awareness campaign to educate taxpayers and end the HST confusion,”
concluded Dorothy Mason. “For average homebuyers, learning that the HST
does not apply to the full purchase price means a $40,000 saving they weren’t
expecting.” Ipsos Reid conducted the survey among 830 Ontarians from Ipsos’s online panel,
between October 4, The estimated margin of error is +/-3.8 percentage points, 19 times out of 20.
The Ontario Real Estate Association represents 49,000 brokers and salespeople
who are members of the 42 real estate boards throughout the province. OREA
serves its REALTORpublications, educational programs, advocacy, and other services.