Ontario Government Proposes Measures for New Housing
The McGuinty government is proposing measures that would build on the comprehensive tax package announced in the 2009 Ontario Budget:
- Enhanced new housing rebate - The province would enhance the new housing rebate so that new homes across all price ranges would receive a 75 per cent rebate of the provincial portion of the single sales tax on the first $400,000. For new homes under $400,000, this would mean, on average, no additional tax amount compared to the current system.
- New rental housing rebate - Similar to the enhanced new housing rebate, the province is proposing a rebate for new residential rental properties. This proposed rebate would support affordable rental housing across Ontario.
- Transitional rules - The province is also proposing transitional rules for new housing. Generally, as part of the transitional rules, sales of new homes under written agreements of purchase and sale entered into on or before June 18, 2009 would not be subject to the provincial portion of the single sales tax, even if both ownership and possession are transferred on or after July 1, 2010. The tax would also not apply to sales of new homes under written agreements of purchase and sale entered into after June 18, 2009 where ownership or possession is transferred before July 1, 2010.
The enhanced housing rebate announced on Friday is only for newly constructed homes as these homes would be subject to the single sales tax when it comes into effect on July 1, 2010. Re-sale homes are not currently subject to PST and would also not be subject to the single sales tax.