New Ontario Budget Announces HST to Replace PST and GST

WeirFoulds LLP Property - Budget Alert - March 2009 | MARCH 27, 2009
Lisa Borsook

In its budget of March 26, 2009 the Government of Ontario announced the harmonization of PST and GST effective July 1, 2010.

The tax on lease payments by tenants will increase from 5% (GST only) to 13% (the harmonized rate).

For tenants that receive a full GST input credit there will be no "real dollar" effect, merely a cash flow adjustment. However, for tenants that did not receive a "full" input tax credit for GST, there will be a real increase in taxes payable on rent.

There are special rebates available for not-for-profit organizations, charities, municipalities, universities, schools and hospitals.

Further bulletins will be released with transitional rules in the coming months.

Please contact Lisa Borsook at 416-947-5003 or lborsook@weirfoulds.com if you have any questions regarding how the harmonized taxes might affect your business.