Ontario renters to be shielded from rent hikes due to HST

TORONTO, Ont. - Ontario Premier Dalton McGuinty confirmed the province will protect more than a million renter households from rent increases due to the harmonized sales tax, when it starts in July.

McGuinty spoke to reporters Monday morning and said the province will close the loophole that would have let landlords apply for above-guideline rent hikes based on the 13 per cent tax on utilities.

Instead, the new HST costs for utilities will be reflected in rent only as they affect the Consumer Price Index, which is used to calculate annual rent hikes.

Landlords have warned that the HST would boost residential rents by 2.5 to three per cent and cost the average tenant $270 to $320 more per year.

A landlord lobby group has been calling on the government to exempt the HST for rental housing providers since the tax plan was announced in last year's budget.

In addition to utility costs, the HST will apply to several previously tax-exempt costs such as maintenance, property management and renovation contracts. Rent remains exempt from sales tax.