Viewpoint: HST will have real impact on condo owners

Special to The Bulletin

By Rosario Marchese – 

00When Linda Pinizzotto steps out of her office to show condos to potential buyers, she knows there’s a storm looming on the horizon for her clients. “The HST will have a huge negative impact on affordability and real estate value. I don’t think owners fully understand the ramifications.”

Pinizzotto lives in a condo in the area, has sold real estate for 30 years and was recently elected as the chair of the Condo Owners Association of Trinity-Spadina.

So why is she so worried?

The Harmonized Sales Tax (HST) will combine the current Provincial Sales Tax (PST) of 8% and the Goods and Services Tax (GST) of 5% into a single blended tax. What most people don’t realize is that the PST was exempt from many purchases like gas, coffee, haircuts, electricity, vet bills and the list goes on. The increase in costs will be hard to bear for many people in the community.

A large number of Trinity-Spadina residents live on fixed incomes—pensions, employment insurance, disability support—and many others are facing tighter budgets than normal in recessionary times.  Being forced to pay an extra 8% on many of their daily goods is a hard pill to swallow.

Many neighbourhoods in the area are made up of older homes, often heated with oil-based systems.  Residents have seen significant increases in their heating costs over the last few years, and are now faced with yet another increase that will make winter even more difficult to deal with. In particular, condo owners will be hit hard.

“The 8% increase is going to include utilities, contract services, maintenance contracts, plumbing, landscaping, legal fees, security, construction materials, home inspections and renovations”, says Rose Demelo, who lives in a condo at 231 Fort York. “This will affect the condo fees as there will be an impact on reserve funds – boards will have to find a way to make up for the additional costs.”

The final cost will be shouldered by condo residents. “If your monthly fee was $350 this year, it could go up to $400 or higher,” says Pinizzotto. “Condos built within the last two years will be hit the hardest, as they have to absorb the inflationary increases since pre-construction. These buildings could have up to a 25% fee increase if they need to top up the budget. Owners have to take action.”

My office has received letters from all over the GTA from people who will not be able to move into condos they thought they could afford before the HST.  For people who have purchased condos that will not be constructed until after the tax comes into play, the additional tax will mean cost increases that could push into the tens-of-thousands of dollars. Many owners are concerned they will no longer be able to afford condos they have already agreed to purchase.

Letters and calls have been pouring in to our offices, with diverse concerns about the new tax, but with nearly unanimous opposition to the looming HST.  The Ontario NDP’s petition against the HST has already gathered over 60,000 signatures, and continues to grow.

One-time tax rebates being issued to families and individuals to help offset the new tax are not making people any happier.  Many residents feel the provincial government is attempting to bribe them into accepting the tax. The new tax will take effect on July 1, 2010. For information on how to take action, call my office at (416) 603-9664, or visit

Marchese is MPP for Trinity-Spadina