More taxes on newly constructed homes
At the end of the March the Province of Ontatrio released new tax guidelines. Under these guidelines purchasers of newly constructed homes will pay more taxes than they used to. According to the bulletin:
Purchasers of new homes oftenagree to a base purchase price and then advise the builder of any extras and upgrades that they want. The value of these extras and upgrades are to be included in determining the value of the consideration.
Simply, it means that you will pay the taxes not only on the price of the house, but also on the upgrades that government considers "permanent." These items include extra doors, whirpool baths, fireplaces, tree planting, driveway paving, and others.
It is still not clear how these guidelines will be implemented, since there is a lot of resistance from interested parties. In any case if you are planning to purchase a newly constructed home, you should carefully evaluate these and other tax issues associated especially with new homes. To learn more see the bulletin itself and how Land Transfer Tax is calculated, or contact me.
Purchasers of new homes oftenagree to a base purchase price and then advise the builder of any extras and upgrades that they want. The value of these extras and upgrades are to be included in determining the value of the consideration.
Simply, it means that you will pay the taxes not only on the price of the house, but also on the upgrades that government considers "permanent." These items include extra doors, whirpool baths, fireplaces, tree planting, driveway paving, and others.
It is still not clear how these guidelines will be implemented, since there is a lot of resistance from interested parties. In any case if you are planning to purchase a newly constructed home, you should carefully evaluate these and other tax issues associated especially with new homes. To learn more see the bulletin itself and how Land Transfer Tax is calculated, or contact me.
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