If you have bought a newly built home, built it yourself or contracted a builder to build it for you, or if you substantially renovated your home, you may be eligible for the GST/ HST new housing rebate.
What Is The HST New Housing Rebate?
When you buy a newly built home, the Harmonized Sales Tax (HST), which combines the federal Goods and Services Tax (GST) and Provincial Sales Tax (PST), is charged against the purchase price of a new home, as it is for other new items. To help make housing more affordable, the government is offering new housing rebates on the GST/HST paid on new homes. There is a federal rebate for the federal portion of the tax, and a provincial rebate for the provincial portion, under the Ontario new housing rebate.
Sometimes, a builder will have you assign the rebate to them and they will claim the GST/HST rebate on your behalf and reflect the rebate amount in the final price
What Properties Are Eligible?
The rebate is intended for a property that will be the primary place of residence of the purchaser or the purchaser’s relation.
Any newly constructed or substantially renovated house or condo that you or your family are living in is eligible. If you are looking to flip the property, you may need to repay the rebate.
Eligibility includes if you contracted someone to build a house or heavily renovate your existing house. A substantial renovation means at least 90% of the home was reworked. Rebuilding a home destroyed by fire is also eligible, as is a significant addition that at least doubles your living space, or a conversion from a commercial property or non-residential property into a residence.
For the federal rebate, the fair market value of the property must be less than $450,000 to claim the GST portion. With a fair market value above that, you can still claim the provincial (Ontario) PST part of the HST rebate. Fair market value is based on the estimated amount a buyer would be expected to pay under normal conditions.
Ontario New Residential Rental Property Rebate
The Ontario NRRP Rebate applies to rental property purchasers who are looking to use a property as an investment property. They can apply after closing and after the purchased property has been rented out for at least a year.
What Rebate Amount Can You Expect To Claim?
When you paid for your new home or renovations, you would have paid the Harmonized Sales Tax on top of it, which is a combination of the federal GST and the Ontario PST taxes. There are two rebate portions – one for the federal GST component paid, and one for the Ontario PST component paid. The two components have different rebate rules, being provided by the different governing bodies.
For the GST, or federal, portion, 36% of the GST tax amount, you can claim up to a maximum rebate of $6,300.
For the Ontario PST Portion, 75% of the PST tax amount, up to a maximum of $24,000 is possible, if HST was paid on the land. If HST was not paid on land, a maximum of $16,080 is possible.
This means you could be eligible for a maximum HST rebate claim of over $30,000. The Sproule + Associates Calculator can give you a better idea of what you could be eligible for.
How Long After Applying Can You Expect Your HST Rebate?
You have up to two years to apply for the HST rebate after you have closed on your property, or completed your renovation or new build.
The length of time can vary, especially if the CRA has requested an audit. On average, once the Canada Revenue Agency (CRA) has received your application, it takes about eight to twelve weeks. Historically NRRP rebates have taken longer to process. Four weeks is usually the fastest you can expect to receive one; occasionally, especially with an audit, it may take up to six or more months to process.
Need Help Applying for the New Housing HST Rebate?
Sproule + Associates helps owners of eligible newly-built and owner-built homes receive the maximum GST/HST New Housing Rebate that they are owed. We can help you receive the maximum amount you are owed for your HST rebate for your owner-built, or contracted newly built place of residence, or for your eligible renovation.
We help you understand your individual case and whether or not you are eligible, fill out and submit your paperwork, and represent you if necessary with the CRA. We are dependable, and passionate about providing the highest level of service to our clients, and will support you, every step of the way.