Harmonized sales tax (HST) became an integrated sales tax for the province of Ontario on July 1st, 2010. It combined Federal Sales Tax and Provincial Sales Tax.
Is there HST on new condos in Ontario?
Goods and Sales Tax (GST), the precursor to HST was enacted into law with the Excise Tax Act. Buyers in Ontario pay 13% HST of the final purchase price on newly constructed homes, including pre-construction condo purchases and each newly built house. It has a two-part structure; 5% is the federal portion and 8% is the provincial part of the HST. Taxation, including that on housing, falls under the Canada Revenue Agency portfolio of the federal government.
For the most part, individuals that go with a residential resale as their primary residence will not have to pay HST on the purchase of their new house. Taxation, if any, on a property, be it a new residential property or other kind of property, will be addressed in the purchase agreement drafted by your real estate agent. Buyersof new built homes from registered builders are responsible to pay HST, but are not required to pay HST on previously owned homes.
HST Housing Rebate in Ontario
The Ontario HST Rebate Program is sometimes called the Ontario New Housing Rebate or HST New Home Rebate. New housing rebates are available for new homes if you buy a new property from a registered builder, or hire a builder for the construction of the home. This can also include pre-construction condos.
Most new home builders will reduce the list price of a new home by the value of the HST rebate. In doing so the builder is able to claim the rebate on the purchasers behalf thereby eliminating the requirement of the purchaser to claim the rebate from the CRA. If the property is to be used as a rental or income property the purchaser, or their representative, will need to claim the rebate after the property has closed and a tenant has been secured. The rebate amount for investment properties may be lower because the federal portion of the rebate is tied to the market value of the property at closing and not the price paid to acquire the property.
Want to know how much HST New Housing Rebate you may qualify for? Try this HST Rebate Calculator Ontario https://www.my-rebate.ca/rebate-calculator/.
Who Qualifies for HST New Housing Rebate?
Anyone who purchases a newly built condo from a registered builder qualifies for a rebate. Individuals that purchase a property for use as their principal residence will typically not need to file an application as the developer will claim on their behalf. Investors will need to file an application once they have a lessor in place.
When Multiple Buyers Get Involved
GST/HST new housing rebates can be claimed when more than one person purchases and maintains a home.
How Long Does it Take to Receive a Rebate in Ontario?
Although some things could affect the time it takes to obtain your rebate, you can normally expect it to take between 8-12 weeks. Navigating through the ins and outs of taxation on property and the application process for subsequent eligible maximum rebate amounts can feel like a labyrinth and mistakes can be costly. Consider connecting with a professional before filing anything with CRA.