Ontario REALTORS(R) recommend HST relief for homebuyers

TORONTO, Feb. 16 /CNW/ - Ontario REALTORS(R) are calling on the Government of Ontario to provide relief from the harmonized sales tax (HST) for homebuyers by reducing the provincial land transfer tax (LTT) rate.

The recommendation, which is contained in the Ontario Real Estate Association's (OREA) 2010 pre-budget submission to the Standing Committee on Finance and Economic Affairs, would save the average homebuyer almost $1,600.

Under the HST, home buyers and sellers will pay 8 per cent more on legal fees, appraisals, real estate commissions, home inspection fees, and moving costs, adding about $1,500 in new taxes to the average residential real estate transaction in Ontario.

QUOTES:

"The HST is going to hit homebuyers and sellers hard," said Pauline Aunger, a Rideau St. Lawrence REALTOR(R) and President of OREA. "Cutting the provincial land transfer tax rate will help offset the cost of the harmonized sales tax, making homeownership more affordable for all Ontarians."

"Our clients deserve a tax break," said Barb Sukkau, a Niagara REALTOR(R) and Chair of OREA's Government Relations Committee. "Ontario's REALTORS(R) are open to working with the provincial government to find solutions to assist Ontario homebuyers and sellers transition to the HST."

QUICK FACTS:

OREA proposes that the Government of Ontario reduce the provincial LTT rate by 0.5 per cent on all property value tax brackets. This proposal would save the average Ontario homebuyer $1,591 and cost the provincial government $311 million annually.

OREA estimates that the HST will add $1,513 in new taxes to an average resale home costing $318,366. OREA also estimates that the HST will add $310 million in new taxes annually to residential resale home transactions.

OREA represents 47,000 brokers and salespeople who are members of the 42 real estate boards throughout the province. OREA serves its REALTOR(R) members through a wide variety of professional publications, educational programs, advocacy and other services.

    
    -------------------------------------------------------------------------
                      Current LTT vs. OREA Proposed LTT
                           Average 2009 Home Price
                                 ($318,366)
    -------------------------------------------------------------------------
                                                        OREA
                                                      Proposed
    Property Value        Current LTT       LTT        LTT Tax       LTT
     Tax Brackets           Tax Rate    Payable ($)     Rate      Payable ($)
    -------------------------------------------------------------------------
    Less than $55,000            0.5%       275.00           0%            0
    -------------------------------------------------------------------------
    $55,000 to $250,000          1.0%     1,950.00         0.5%       975.00
    -------------------------------------------------------------------------
    $250,000 to $400,000         1.5%     1,025.49         1.0%       683.66
    -------------------------------------------------------------------------
    Above $400,000               2.0%          N/A         1.5%          N/A
    -------------------------------------------------------------------------
    Total LTT:                            3,250.49                  1,658.66
    -------------------------------------------------------------------------
                                                        Tax
                                                        Savings:   $1,591.83
    -------------------------------------------------------------------------
    

SOURCE Ontario Real Estate Association

For further information: For further information: Jim Flood, Director, Government Relations, (416) 442-3408, djflood@orea.com

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