The Independent Mortgage Brokers Association of Ontario (IMBA) calls the potential 13% HST on broker commissions “the most pressing issue facing mortgage agents and brokers right now.”
It emailed an eye-catching information bulletin to brokers today, saying: “Your income may be about to be slashed by 13%.” IMBA states that “any financial service fees found not to be exempt would be subject to GST as of Dec 14, 2009.”
Prior to this year, financial services agents (like mortgage brokers, insurance agents, financial advisors, etc.) were GST exempt. If you assume the average mortgage planner makes $50,000 a year, this tax could wipe out roughly $6,500 a year of those earnings, minus deductions.
IMBA has partnered with other provincial mortgage associations (MBABC & AMBA) to fight and re-establish the mortgage services tax exemption. They will advise once a ruling has been handed down.