How much is HST in Ontario?
Although the Harmonized Sales Tax was implemented on July 1, 2010, many Ontarians are still unaware of how this impacts homebuyers. HST in Ontario is 13% and here’s a quick summary of what HST is, and what HST includes.
What is HST (Harmonized Sales Tax)?
HST is a combination of the 5% Federal Goods and Services Tax (GST) and the 8% Ontario Retail Sales Tax (RST or PST) – 13% total. The biggest change is to services that were not subject to the Ontario PST, but will now be subject to an additional 8% in taxes under HST.
What’s the Up Side?
HST resulted in the removal of the hidden PST which was buried into the price of final goods and services. This should result in lower costs incurred by businesses and potentially allow savings to be passed onto consumers. HST also makes things easier for businesses currently charging both GST and PST; one sales tax is all they need to worry about.
What Services Are Now Subject to HST?
Quite a few common services will be affected. Consumers are most likely to notice an increase in the price of gasoline and heating fuels. Electricity will no longer be exempt from provincial sales tax, nor will tobacco. Personal services like haircuts, membership fees for clubs and gyms, magazines, and taxi fares will all be affected.
With regard to services associated with buying a home or home ownership items such as renovation services, legal fees, real estate agent commissions, landscaping, land survey reports, home inspections and cleaning – will all be subject to the new HST.
Only newly constructed or substantially renovated homes will be subject to HST.
Here’s a list of common products and services that were subject to 5% GST before July 1, 2010, but will be charged 13% HST in Ontario after July 1st:
- Dry cleaning
- Electricity and heating
- Internet access services
- Home service calls (i.e. electrician, plumber, carpenter)
- Landscaping, lawn care and private snow removal
- Hotel rooms
- Camping sites
- Domestic air rail and bus travel originating in Ontario
- Magazine subscriptions
- Home renovations (i.e. installation for a new kitchen, or painting services)
- Real estate commissions
- Massage therapy
- Green fees for golf
- Gym membership fees
- Sports and leisure lessons/classes (i.e. dance, karate, hockey, soccer, sewing, etc) (some exemptions apply)
- Hall rental fees
- Fitness trainer
- Hair stylist
- Esthetician services
- Funeral fees
- Legal fees
- Cigarettes and other tobacco purchases
- Nicotine replacement products