Buying a new home will now be subject to 13% tax. For example to purchase a $500,000 new home after July 1st, 2010 would end up costing you $40,000 dollars in tax. If you are purchasing pre -construction (new) real estate, here are two ways to avoid this new tax:

1. Purchase a condo or new home under $400,000 as units at this price range are exempt from the tax.
2. Purchase a condo or new home before July 1, 2010.

Here's the good news: If you are purchasing re-sale real estate you can avoid this tax on your purchase price.  Buyers and sellers of resale homes will still be affected though as the new tax would apply to many services that are currently exempt from PST. Such services include legal fees, real estate agent commission, renovation services, land survey reports, home inspections, landscaping and house cleaning services. Also affected would be the cost of labour for installations or repairs, additions, renovations, driveways, roads, fences, swimming pools and patios.

Homebuyers are still recovering from the imposition of last years City of Toronto land transfer tax. And let's not forget the recession we are currently going through as well. The last thing Ontario needs is a new 8% increase on new homes and professional services. Thank you McGuinty!

What you can do:

As a result of this new tax, the Ontario Real Estate Association (OREA) is asking the public to voice their opinion on this new tax. Click here to send a letter to your MP (the letter is already written for you, you just have to fill in your info).