Did you know that the GST/HST new home rebate program also applies to condos? The federal government and the Ontario provincial government introduced a new housing rebate to help make housing more affordable, and this is available to condo owners.
The Canada Revenue Agency implemented the program to combine both the provincial (PST) portion and the federal (GST) portion of the tax rebates. Combined, these apply to the full 13% HST amounts added to the purchase price of your condo.
The rebate applies to a newly built house, including a condo or substantially renovated house, that is a primary place of residence.
Harmonized Sales Tax (HST) Rebate Breakdown
When you buy a new home or contract to have a new residence built for you, you pay 13% HST on the purchase price of the home. The GST or federal portion of this is 5%, while the provincial portion is 8%.
The federal rebate lets you claim 36% of the GST if your home’s purchase price is $350,000 or lower. If the price was between $350,000 and $450,000, the rebate is scaled to reduce the rebate received until it reaches 0% if the purchase price is $450,000 or higher. The provincial rebate lets you claim up to 75% of the provincial sales tax portion. The maximum provincial tax that can be claimed is $24,000, but unlike the federal portion of the rebate, this provincial portion does not claw back the amount of rebate received.
Be sure to keep receipts for all related goods and services; note that the fair market value of your condo after all renovations and construction were completed will be considered for your rebate.
How Much Could You Receive?
With the combined federal and Ontario new housing rebate, you could receive up to $30,000. An easy way to calculate an estimated amount is with a new housing rebate calculator.
If you purchased a pre-construction condo or home, your builder may have offered you a discount with a clause under the purchase agreement that you signed off the rights to claim the housing rebate from them. In this case, they will have provided you a discount, to then claim the rebate themselves. If so, you would not be eligible for the rebate amount.
When Could You Receive It?
The time to receive a rebate is generally about four to eight weeks from when the CRA receives your application unless there is a CRA audit. It can take as long as six months. You have two years from the property closing date or the date of completion of the renovation or new build project to apply.
What Properties Are Eligible For The Housing Rebate?
You may be eligible for the new housing rebates for your new condo; the rebate does not just apply to a new house.
If you purchased a new property that was newly constructed or substantially renovated as a primary residence for you or your family which is on land you purchased or will lease for at least 20 years, you might be eligible for the GST/HST new housing rebate. This includes if you contracted someone to build or substantially renovate your house or residential condominium unit.
If you personally build, substantially renovate your home, or add a significant addition that at least doubles the size of your house, your costs may be eligible. This includes the conversion of a non-residential property into a residential unit or principal residence intended to be lived in. A critical aspect of the rebate is that the property must be for you or a relative to use as a primary residence. A home that was rebuilt because the original was destroyed by fire is also eligible.
A GST/HST rebate may also apply if you purchased shares in a newly built or substantially renovated co-operative housing project and will be using it as a primary residence.
If your substantially renovated or newly constructed home is a mobile or floating home, you can claim the HST new rebate if the property was built by the owner or purchased from a builder.
Residential Rental Property Rebate
As an investor, you can also benefit from the federal/Ontario HST rebate, under the New Residential Rental Property Rebate.
With this tax rebate program, if you buy an investment property or properties, with the intention of using them as rental properties, you can apply to the CRA for an HST rebate.
To be eligible for this, you must have purchased a new condo or house in the past two years and have tenants signed on for a minimum of one year after closing on the property. You and your immediate family cannot have lived in the property before your tenants take occupancy of the property.
Assistance With The HST Rebates Process
Sproule + Associates can help you get the HST rebate amount you are owed. We will advise you why you may or may not be eligible, and help you throughout the process, including filling out paperwork and representing you with the CRA. We are experienced and understand what is needed to receive the New Housing Rebate; we work hard to help you receive the maximum rebate possible.