Harmonized tax will hike fees for condo owners

Don Peat
St. Catharines Standard

Condo fees will go through the roof thanks to the province’s impending Harmonized Sales Tax, an owners’ association warns.

“It is going to be a mess,” Linda Pinnizotto, the chairman of the Trinity-Spadina Condo Owners, told the Sun Wednesday.

“I think it’s time for (people) to understand what the impact is before it’s too late because it is going to get too late,” said the realtor and president of two condo corporations.

Last spring the Ontario government unveiled its plan to harmonize the provincial sales tax with the federal goods and services tax for a combined 13 per cent HST.

If the proposed tax harmonization goes ahead, condo owners would see a massive rise in maintenance fees, Pinnizotto said.

“Condominiums are geared towards service related elements in their budgets … 80 per cent of their budgets are geared towards services (such as) property management, security,” she said.

With the new system, all those services that are now taxed for only five per cent GST will be hit with the full 13 per cent HST rate, forcing condo boards to jack up maintenance fees.

Boards will also have to increase condo owners’ contributions to reserve funds to match the larger operating budgets. That will hit newer buildings harder because those owners are already contributing more to build up the reserve funds.

“It’s going to blow it totally out of proportion,” Pinnizotto said. “Who wants to have their maintenance fee higher than their mortgage?”

The NDP and the Progressive Conservatives have been highly critical of the HST since it was introduced by the Liberal government.

Last month PC Leader Tim Hudak urged renters to hop on his anti-harmonized sales tax bandwagon, pointing to a study that says it could add $320 a year to the cost of a $1,000-a-month apartment.

Finance Ministry spokesman Scott Blodgett said the HST is part of a larger tax package. The government has proposed broad-based income tax cuts that will be effective Jan. 1, 2010, and lower income taxes for 93 per cent of the province’s taxpayers, he said.