While I have heard musings that this will impact the real estate market negatively, the launch of 111 West on Richmond Rd that same week seemed to find the general public undeterred:
To be sure, a number of services involved in the purchase of real estate—realtor commissions, legal fees, moving, home inspections, mortgage insurance premiums—will now be subject to a 13% tax, as opposed to 5%.
Also to be affected are condo fees, the bulk of which cover taxable service contracts such as property management, maintenance, insurance and utilities. If you're concerned about the extra surcharge, then do take solace in the fact that HST will not apply to any sales agreement firmed up before June 18, 2010.
But I'm doubtful that the HST itself will derail serious plans for a real estate purchase: most renters will at some point be looking at real estate with a view to building up equity rather than paying rent. And property owners will continue to resell their current homes, for the most common reasons as in the past: job transfers, upsizing and downsizing.
