Buying a new house or condo is an exciting time in any person’s life. It signals new beginnings and new investments in our future. It also signals an important investment and a long repayment period.
When buyers first purchase a new property, they may be shocked to find that the cost of the land and structure is only a portion of the closing costs. Home buyers are required to pay other related costs including HST on new purchases – even new property.
Tax On The Purchase Of Your New House
In Ontario, buyers are charged 13% HST on new homes. This tax is broken down into two segments, 5% being the federal portion and the remaining 8% being the provincial part. While 13% may not seem like a lot at first, it can definitely pile up quickly for first-time buyers.
Most new home purchases include both federal and Ontario HST in the purchase price of a home. For example, a new house with a list price of $450,000, includes almost $52,000 in HST in the overall price of the home. . .
The New Housing Rebate allows buyers to recover some of the tax by way of a rebate..
Save With The GST/HST New Housing Rebate
- Newly Constructed Homes: Buyers that purchase a house from a builder may receive the HST rebates.
- Substantially Renovated Homes: A home that has been substantially renovated substantially by yourself or a builder.
- An Owner Built Home: If you or someone you hired have built a new home in the last two years.
- Purchased A New Rental Property: If you’ve purchased or renovated a home to become a rental property and have tenants sign a lease for one year.
Apply for the HST Rebate in Ontario
In order to claim the GST/HST New Housing Rebate, owners will need to meet eligibility requirements such as:
- The home must be a residential property
- The construction, renovations or sale must have occurred in the last two years
- Real estate investors cannot apply for the Ontario New Home Rebate. However, there are other provincial rebates available to them.
Even if they meet these requirements, they must have receipts, complete an application and submit it to the CRA. Even after this is done, there is no guarantee that they’ll receive the maximum rebate amount or even have their claim approved. We recommend that all owners apply for the rebate with the help of tax experts. They can help you get the most out of your rebate.
