Premier Dalton McGuinty’s Liberals are sweetening the pot in a bid to make the controversial harmonized sales tax (HST) more palatable to Ontarians.
In a surprise move last Friday morning, the government announced it was capitulating to homebuilders’ demands by effectively reducing taxes proposed on new homes. Under the change, buyers of new homes in all price ranges would receive a 75% rebate of the 8% provincial portion of the HST on the first $400,000 of the cost.
In the March 26th budget, Finance Minister Dwight Duncan had said that while people purchasing new homes costing less than $400,000 would be eligible for the tax break, those buying more expensive homes would get little relief.
It would have been a recipe for disaster for consumers and developers because there would be a gradual increase in taxes on homes costing between $400,000 and $500,000, and a massive one on those priced above $500,000. For residents of Greater Toronto, where homes are more expensive than in the rest of Ontario, it would have been especially onerous. – Toronto Star
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Many also feel HST will be introduced at a bad time. With the whole country still fresh in the memory of the effects of the recent economic downturn, the anti-TAV group believes that it is unfair that the government has struck the public during the tax-hike many are still in recovery mode.
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