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On July 1, 2010, Ontario transitioned to the Harmonized Sales Tax (HST) on the sales of new homes, raising the tax payable on new-builds from 5% to 13%. As you may imagine, this increase has made the cost of purchasing a new home more expensive.
Individuals who purchase newly built homes for their primary place of residence or for investment purposes pay tens of thousands of dollars in tax.
Additionally, with the recent housing boom causing house prices in the Canadian property market to increase dramatically, this extra tax means purchasing a new house has become extremely expensive, if not impossible for some people.
The GST HST New Housing Rebate can mean that recent home buyers who purchased a new build are eligible to receive a rebate.
What is Goods and Services Tax (GST) and Harmonized Sales Tax (HST)?
In order to fully understand the New Home HST rebate, it’s important to define HST and GST. The Goods and Services Tax (GST) is the tax that is added onto specific purchases of goods and services. On these purchases, 5% of the purchase price is applied as tax.
HST is a tax that is included on certain purchases in certain provinces across Canada. It is the combination of GST and the provincial sales tax (PST) and usually comes out to 13% in total.
What is the New HST Housing Rebate?
In an effort to make purchasing a new build house or condo more attainable, the Ontario and Canadian governments have implemented the HST provincial new housing rebate.
Through these new housing rebates, homebuyers are able to apply and receive back a portion of the property taxes paid on new houses purchased. The rebate covers both a new or renovated house, specifically substantially renovated housing.
Depending on your situation or eligibility, you can earn back the provincial portion, federal portion, or a portion of both of these taxes. To see if you are eligible for the tax rebate, read below!
GST HST New Housing Rebate Eligibility
If you purchased a home in the last year or so, you may be wondering if you are eligible for this HST and GST housing rebate. You qualify for this housing rebate of up to $30,000 if you are in one of the following categories:
- You have purchased a home that was newly constructed
- You have purchased a new condo unit
- You have built your own house
- For owner-built houses, it is important to note that individuals can apply to earn back some of the GST or federal portion of the HST paid if the individual meets the following qualifications:
- the owner or a direct relative of the owner is the first individual to occupy the place of residence since the build or renovation
- For owner-built houses, it is important to note that individuals can apply to earn back some of the GST or federal portion of the HST paid if the individual meets the following qualifications:
- Have a substantially renovated house that you did yourself or that was done by someone else
- Had a major addition built onto your primary residence
- Purchased shares in a co-operative housing corporation that was newly constructed
- Recently converted a non-residential property into a place of residence.
Eligibility can come in a variety of different circumstances. If you think you may be eligible, you can talk to a professional and consult our Rebate Calculator to get an idea of how much you could earn with this new house rebate.
As well, all receipts on federal and provincial taxes or provincial land transfer taxes, as well as receipts for any renovations should be kept and filed when filling out your GST HST New Housing Rebate application.
What's the Maximum Rebate I Can Get?
While a certain amount is not guaranteed, individuals can receive up to $30,000 in rebates, depending on their situation. In some cases, homeowners will receive only the provincial rebate or only the federal rebate.
To get a sense of how much you can receive back, be sure to check out our calculator.
When Can I Apply for the HST Rebate?
So you’ve just purchased a newly constructed home and are wondering when you have to apply for your rebate. In order to be eligible for your rebate, your application should be completed within 2 years of the closing date of your new home or condo purchase.
For renovated properties, homeowners have two years from the completion of the renovation to fill out their application for the housing rebate in Ontario.
When Can I Apply for the HST Rebate?
After you have applied for your Ontario New Housing Rebate, the next step is the waiting game. While you won’t receive your rebate immediately after you apply, the Canada Revenue Agency works to get most payments made within two months. However, some payments may take up to six months to receive.
What is the Primary Residence Requirement?
As we’ve outlined in the eligibility requirements above, the new housing HST rebates are only available if the newly built house, or residential condominium unit is the owner’s primary place of residence or the owner has transferred that ownership to another party.
This means that, in order to qualify for the New Housing HST rebate, the house can not be an investment property that acts as a residential rental property and is rented out. There is a different rebate, called the New Residential Rental Property Rebate, that can be applied for instead for these types of rental properties. Additional details about this rebate can be found here.
What About My Cottage or Vacation Home?
No, cottages and vacation rentals do not qualify for the HST New Housing Rebate.
What if There is More Than One Buyer?
Prior to the introduction of the April 2021 budget, the GST/HST New Housing Rebate was restricted if there were multiple buyers, not all of whom were related. Budget 2021 removed this restriction such that the GST/HST New Housing Rebate is now available as long as the new home is acquired for use as the primary place of residence of any one of the purchasers or a relation of any one of the purchasers.
Contact Sproule + Associates Today
Do you need more information on your options? Are you hoping to complete an application for the home or new condo HST rebate? Find all your answers and more with our team at Sproule + Associates.
We are here to help you with all your rebate needs, no matter how big or small they are.
Contact us today to get started!
