THE VIEW FROM OAK PARK
The Official Krisztina Blogsite
There has been so much panic about HST and the Real Estate Market these days, so once and for all, I’d like to set the record straight. Previously on a resale home, you paid 5% GST on the 4 major elements in resale: 1. Real Estate Agent Fee 2. Lawyer Fee 3. Home Inspector Fee 4. Land Transfer Tax. Now, with the advent of HST, you will pay 13% on those 4 resale elements. This is an increase on those costs of 8%. You WILL NOT pay HST on the price of your resale home. In translation, the HST means that on a resale home in the $300 – $400,000 range you will pay an extra $2 – $3,000. In the current post-July 1st/HST market, prices have already declined by more than that $2 – $3,000. So, essentially the big picture for buyers has not changed, and could in fact be considered more favourable. The only time HST will be applied to the full purchase price of a home is on New Construction Homes over $400,000.
As for the current market, I also reiterate (to sellers), Don’t Panic and Don’t Compare 2010’s recent market to 2009. 2009 was an anomaly and should essentially be taken out the big picture comparison equation. We had extremely low interest rates meant to offset a possible recession, and many people took advantage. It drove prices up and created an very hot market. As for now, be assured that the market will continue to pick up steadily from the dead zone that was July. I attribute that dead zone to the looming HST (and thus the strong May-June), the typical summer slowdown and the absolutely fabulous weather which sent more people than usual to summer vacations and staycations with Real Estate far from anyone’s mind!! As for me, my business is booming and I am busier than ever. Post HST, I’ve already completed more than 10 deals. Sellers are selling. Buyers are buying. So if you’re thinking about that dream home, go ahead and take the first step – call me!!
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