Many have claimed that Ontario’s plan to introduce a harmonized sales tax (HST) will impose significant costs on the price of homes in Ontario. This is incorrect and in some cases, completely untrue.

Let’s consider the claim that the HST will affect all homes. This is simply not true. The fact is that only new homes over $400,000 are subject to the HST. Existing re-sale homes, regardless of their sale price, will not include the HST. This means that for the community of Greater Sudbury, most people will not be affected by this since the median price for a single detached and semi-detached home is $348,450.

As for HST on new homes built in Greater Sudbury, the numbers don’t add up. According to the Canadian Mortgage and Housing Corporation, the average unit price of a newly completed single detached and semi-detached home built in Greater Sudbury is $361,000, and since 60 per cent of the homes in Greater Sudbury are sold and purchased for less than $380,000, very few residents will see the HST affect their home buying and selling decisions.

When we expand that and compare our community to the province, the picture becomes clearer: 75 per cent of new homes being built in Ontario will not be affected by the HST because they average well below that $400,000 mark.

However, for homes in the region that are over $400,000, the Ontario government will provide a rebate on the provincial portion of the HST on new homes up to $400,000 and a reduced rebate for homes up to $500,000. New home buyers will qualify for a 75 per cent rebate on the provincial portion of the single sales tax on the first $400,000 – regardless of the total new home price. As a result, buyers of new homes will receive greater benefit from reduced residential construction costs.

As I have said before, the HST will be good for business and the consumer. It will reduce business investment costs by reducing the corporate income tax rate to 4.5 per cent and save businesses money when purchasing material and equipment. Similarly, consumers will see $10.6 billion in temporary and permanent tax relief over three years. This will mean transition funding of $1,000 for families with income below $160,000 and $300 to singles with income of $80,000 or less. Transition payments will be paid in two installments in 2010 and a third in 2011.

Ultimately, reports and arguments will be publicized claiming authority on the issue. It is critical that you the take the time to review the information on the subject – from all sides. The Greater Sudbury Chamber of Commerce recommends you take the first step and visit www.taxharmonization.ca to learn more.

Debbi Nicholson
President and CEO
Greater Sudbury
Chamber of Commerce