The government of Ontario is considering combining the eight per cent Provincial Sales Tax (PST) with the five per cent federal Goods and Services Tax (GST). If that happens, it could result in thousands of dollars in additional costs for people buying resale homes and tens of thousands of dollars for people purchasing new homes.

Only a few months ago, there was a verbal spat between Fed Fin. Minister and Premier Dalton McGuinty on the issue of GST/PST harmonization and higher rate of Corporation taxes for businesses in ONT. At that time Mr. McGuinty did not cave in to fed demands and insisted that the system was working well.

What has changed in the last few months that made him to do an about turn on this issue....is it the fed pressure or the business lobby that has succeeded in pressurising Mr. McGuinty to defend harmonization, when it is clearly evident that consumers (not just the home buyer/sellers) will be sole losers. It is easily said that the savings for the businesses will be passed on to the consumers. Only big corporations will save with the harmonization and we all know their track record of passing the savings. The savings will translate into big bonuses for the CEO of these corps.

It is time for us to take action. It does not matter whether you don't plan to buy or sell a home in the near future. Your insurance costs, home heating bills, gas prices, children/infant clothing, repairs & renovation, etc. will be also be affected. Future non-Liberal governments will never reverse these changes (even if the opposition parties voice opposition to these measures now) since it is hard to let the "grabs" disappear (remember the Abolish GST pledge by the fed. liberals?).

YOU CAN HELP STOP THIS PROPOSAL by contacting your MPP by going to http://www.orea.com/consumercfa, which will automatically tell you who your MPP is and send them an email voicing your concern.

Thanks.

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Rajeev Narula, Broker, REALTOR®
ACE TEAM REALTY INC., Brokerage
10 Kingsbridge Garden Circle, Suite 704
(Opp Square One - HWY10/403)
Mississauga, ON L5R 3K6
Bus: 1-888-355-3155 Ext. 300
Fax: 1-888-443-3155
Email:
Web: http://www.RAJEEV.ca" rel="nofollow">LINK

I just did.

Thanks Ashu.

On the same subject.... this comes from CREA/MREB release:

New study says tax harmonization would slam door on homebuyers

Ontario’s new homebuyers would face a massive tax grab under the proposed harmonization of the federal GST and Ontario PST, a new report released today concludes.

The report on the implications for sales tax harmonization on new home buyers in Ontario was written by veteran housing analyst Frank Clayton, PhD, of Canada’s largest independent real estate consulting and advisory firm Altus Group, for the Building Industry and Land Development Association (BILD). BILD is the Greater GTA affiliate of the Ontario Home Builders’ Association.

The report looked at nine Ontario municipalities and three different home types. It revealed tax increases for single detached homes ranging from $8,957 (Windsor) to $17,049 (Ottawa) in markets outside the GTA, and from $24,566 (Mississauga) to a whopping $46,676 (Toronto) within the GTA.

“All told, harmonization of PST and GST without any offsetting measures by the provincial government would rip $2.4 billon dollars out of the pockets of new home buyers, slamming the homeownership door shut in the face of many Ontarians,” said Stephen Dupuis, President and CEO of BILD.

BILD Chair Leith Moore added that the proposal for GST/PST harmonization couldn’t come at a worse time and runs completely contrary to the Province’s efforts to stimulate spending and jobs.

"There's no point putting the gas pedal to the metal from a stimulus standpoint while braking equally hard with the other foot, but that's what harmonizing the sales tax on housing amounts to," Moore said.

Meanwhile, Ontario Home Builders’ Association president Frank Giannone said harmonization is a “poison pill” for housing. “Housing is the only product that keeps on paying property tax after it is consumed. So to cripple the new home buyer market at this time not only damages the provincial economy, it also hurts governments in terms of revenues. In addition, the HST would also add additional tax to future renovation projects, and we all know tax increases drive consumers into the underground economy and into cash deals. It makes no sense,” he said.

Dupuis explained that builders are not fighting harmonization, but fighting for fair treatment of housing under a harmonized sales tax regime. “The reason housing gets hit so hard is that it is the biggest of the big ticket items and it’s not currently directly subject to PST, for good reason,” he said.

“As matters currently stand, builders are paying an average of two per cent PST embodied in the price of each new home and they’re prepared to keep on paying at that rate, notwithstanding all the other taxes, fees and levies they must endure.

“What home builders are not prepared to do is to sit idly by while home buyers are hammered to the tune of $2.4 billion due to harmonization. That's not on," Dupuis concluded.

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Rajeev Narula, Broker, REALTOR®
ACE TEAM REALTY INC., Brokerage
10 Kingsbridge Garden Circle, Suite 704
(Opp Square One - HWY10/403)
Mississauga, ON L5R 3K6
Bus: 1-888-355-3155 Ext. 300
Fax: 1-888-443-3155
Email:
Web: http://www.RAJEEV.ca" rel="nofollow">LINK

I just did it............

Well, it seems the matter is already addressed by the premier and most of the damage is controlled. However, I think the cost increase on resale home will still remain...

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

Others who know of more consequences, please share your thoughts.

BTW, I already emailed seperately to my MPP David Caplan and he acknowledged the email and informed will forward the views to his party leadership.

Hiren

I just did..

From Toronto Sun's columnist

http://www.torontosun.com/comment/columnists/christina_blizzard/2009/03/25/8873161-sun.html

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Rajeev Narula, Broker, REALTOR®
ACE TEAM REALTY INC., Brokerage
10 Kingsbridge Garden Circle, Suite 704
(Opp Square One - HWY10/403)
Mississauga, ON L5R 3K6
Bus: 1-888-355-3155 Ext. 300
Fax: 1-888-443-3155
Email:
Web: http://www.RAJEEV.ca" rel="nofollow">LINK