Your Guide to the GST HST Housing Rebate: What You Need to Know

‍

‍

GST /HST NEW HOUSING REBATE

The GST HST housing Rebate is designed to assist individuals in recovering some of the Goods and Services Tax (GST) or the Federal portion of the Harmonized Sales Tax (HST) paid on newly constructed or substantially renovated homes intended for use as their primary residence. Various housing rebates are available, including federal and provincial new housing rebates, each with specific eligibility criteria and calculation methods.

Here are the key points summarized:

Federal Rebate Eligibility:

o  Available if the total purchase price of the home is less than $450,000.

o  Applies to newly constructed houses, including condominiums, bought from a builder. The provincial new housing rebate complements the federal rebate by allowing you to recover part of the provincial HST paid for new or substantially renovated houses.

o  Conditions include intending to use the house as your primary residence and meeting all eligibility criteria for the Ontario new housing rebate, such as specific forms and schedules required for claiming the rebate.

‍

‍

Provincial Rebate (Ontario):

o  Can be claimed in addition to the federal rebate to recover some of the provincial part of the HST through provincial new housing rebates.

o  Conditions mirror federal requirements but specifically for Ontario residents.

o  Maximum rebate of $24,000, applicable to the first $400,000 of the purchase price.

‍

‍

New Residential Rental Property Rebate:

o  Available for landlords who purchase new residential properties for Investment Property / Rental purposes.

o  Requires the property to be newly constructed or substantially renovated.

o  The property must be leased to tenants for at least one year for residential use.

o  GST/HST paid on the purchase is eligible for rebate submission.

Considering investing in new residential property for rental purposes? Keep in mind that such purchases typically incur GST/HST on the buying price. Fortunately, the government provides a valuable rebate for newly constructed investment properties. It’s crucial to understand the eligibility criteria for the GST/HST New Residential Rental Property Rebate before committing to a purchase:

1. Property Eligibility: The property must be newly constructed by a builder or undergo substantial renovation or conversion. For owner-built houses, the eligibility conditions include that the house must be constructed or substantially renovated by the owner.
2. Intended Use: Initially, the property must be leased to tenants for at least one year. The tenants must be individuals using the property solely for residential purposes. The rebate can also be claimed for a new or substantially renovated house intended for use as the individual's primary place of residence.
3. Tax Payment: You must have paid GST/HST on the property purchase at closing. If you’ve constructed the property yourself or through a contractor, you’re deemed to have self-supplied and paid tax on the fair market value.
4. Documentation: You need to submit a copy of the one-year lease agreement along with your rebate application to the CRA.

The rebate amount is calculated based on the GST/HST paid, the property’s purchase price, and its fair market value at the time of purchase. If the fair market value exceeds $450,000.00, you can only claim the GST portion of the rebate.

Understanding these requirements ensures you can leverage the rebate effectively when investing in new residential rental properties.

‍

‍

General Requirements:

o  Must have paid the GST/HST on the property at the time of purchase, and in regions with provincial sales tax, the conditions for claiming the rebate must be met.

o  Ownership transfer must occur after construction or renovation is substantially completed. For an existing house, the renovation must be extensive, with significant physical and functional changes, to be considered a newly constructed house.

o  No prior occupancy by anyone before possession.

o  Specific conditions apply regarding lease agreements for rental property rebates.

o  You must apply for the housing rebate within two years from the date of the Closing of Your House.

These rebates are subject to strict eligibility criteria and documentation requirements, including deadlines for submission. It’s advisable to carefully review all conditions and consult with tax professionals like us to ensure eligibility and proper submission of rebate applications.

‍

‍

Conclusion:

Maximize your savings by understanding and applying for the GST/HST New Housing Rebate and New Residential Rental Property Rebate. These rebates make homeownership and property investment more affordable by offsetting some of the GST/HST costs. Ensure you meet the criteria and submit the necessary documents on time to benefit fully.

Don't miss out on these valuable rebates! Contact us today to find out how you can take full advantage of the GST/HST New Housing Rebate and New Residential Rental Property Rebate. Our team of tax professionals is here to guide you through the process and ensure you receive the rebates you deserve. Reach out to us now and start saving on your next property purchase!

‍

‍