The reports states that with these measures in place, Ontario would see:

591,000 net new jobs Increased capital investment of $47 billion Increased annual incomes of up to 8.8 per cent, or $29.4 billion. The report concludes that, as a result of major tax reforms, Ontario would become more competitive internationally, with a lower tax burden on new investment compared to the average of 20 major industrialized and emerging economies.

And it states that small businesses would benefit substantially as the effective tax rate on their business investment would fall by more than half from 28.6 to 13.3 per cent.

Quick Facts

• The harmonized sales tax (HST) is just one part of a comprehensive tax package that would also provide, over three years, $10.6 billion in direct payments and permanent tax relief to the people of Ontario and $4.5 billion in tax relief to businesses.

• Consumers would not have to pay the Ontario portion of the HST on some items currently exempt from RST - children's clothing and footwear, diapers, kids' car seats and booster seats, books (including audio books) and feminine hygiene products.

• As under the federal Goods and Services Tax, the HST would not be charged on items such as basic groceries, prescription drugs and medical devices.

• The HST would result in the removal of $4.5 billion a year in embedded sales taxes when fully phased in.

How Will This Affect You The Home Buyer?

With current reports, it is claimed that purchasers of newly constructed homes under $400,000 would not be subject to an additional tax burden. However, buyers of new homes valued between $400,000 and $500,000 could claim a proportional rebate.

The new housing rebate would be enhanced so that new homes purchased as primary residences across all price ranges would qualify for a rebate of up to $24,000, while continuing to ensure that, on average, new homes priced up to $400,000 would not be subject to additional tax compared to the retail sales tax (RST) currently embedded in the price of new homes.

The effect of the enhanced rebate would be to apply the provincial portion of the single sales tax at a rate of two per cent on the first $400,000 of the purchase price of a new home and at a rate of eight per cent on the portion above $400,000. The rebate would be calculated as 75 per cent of the provincial portion of the single sales tax payable on the purchase of a new home, up to a maximum rebate of $24,000.

This provincial rebate for new housing would be provided for the same types of new residential properties for which a Goods and Services Tax (GST) new housing rebate is available. Qualifying housing would include substantially renovated housing, co-operative housing, owner-built housing, housing on leased land, mobile homes and modular homes for use as primary places of residence.

Ontario's new housing rebate would be federally administered in a manner similar to the GST rebate for new housing. Individuals would be able to file an application for the rebate directly with the Canada Revenue Agency (CRA) if the builder does not pay or credit the rebate to the purchaser at the time of purchase.

How Is Northern Designs Preparing The Implementation?

As Northern Designs starts to prepare itself for the new HST tax, we will continue to keep you informed with any changes our government may make. Due to the new HST tax, our economy has started to bounce back from a hard hit in 2009. As the deadline quickly approaches, designers and trades are going to start feeling overwhelmed with business and might not be able to work your project into the tight timeline needed to save.

To help you prepare your dream renovation, addition, or new home/cottage, Northern Designs is implementing a savings for all new clients who sign an agreement between January and December, 2010. This savings agreement will give you the piece of mind to take the time needed in making difficult decisions. We at Northern Designs don’t want our clients to feel pressured due to more taxes.

Any clients who sign an agreement with Northern Designs between January and December, 2010, will have the additional 8% increase waved and continue to be billed at the current 5% GST rate. Northern Designs values all clients equally and in order to help take your dreams and visually make them reality, absorbing that additional cost is a token of our appreciation to you.

The agreement will be valid for one year from date of approval. Contact Northern Designs today for your free initial consultation.