If you have bought a newly-built home or finished a major renovation this year, you may be wondering if you might qualify for a Goods and Services Tax (GST) and Harmonized Sales Tax (HST) rebate.
The good news is that if you bought a newly constructed house, completed substantial renovations, or have contracted to have either of these completed, you may qualify for this rebate. If you built a house yourself on land that you already leased or owned, or converted non-residential property into your residence, you may also qualify.
Other Types of GST HST Rebates or Credits with the Canada Revenue Agency (CRA)
For clarification, the GST/HST Rebate for new housing is different from a couple of other Canada Revenue Agency (CRA) programs with similar names.
GST/HST Credit for Families with Low or Modest Incomes
The Canada Revenue Agency (CRA) offers a goods and services tax/harmonized sales tax (GST/HST) credit. It is directed at helping lower income and middle income families. It is a tax-free amount paid to eligible households four times a year as a tax refund.
You need to be a Canadian resident for the month prior to a payment and the start of the payment month that the CRA makes a payment to claim the GST/HST credit.
When you file your income tax return, there is an option to apply for the GST/HST credit. You must file a personal income tax return to be eligible; even if you did not receive any income, you should still file a return.
You need to meet one of the following criteria:
- Be at least 19 years old
- Have, or had, a spouse or common-law partner
- Are, or were, a parent and live, or lived, with your child
You also need to have had an employment income lower than a set threshold to qualify, since this credit is targeted at those with low or modest incomes. There are different thresholds for individuals as opposed to families. Only one common-law partner or spouse is able to receive the GST/HST credit, but this will not impact the amount received.
GST/HST Rebate for Employment Expenses
Some provinces, such as Ontario and some others, have harmonized their provincial sales taxes with GST, creating a harmonized sales tax (HST). For the rebate, each of these is referred to as a participating province. Any other is considered a non participating province.
If you have had any employment expenses that you paid for as part of your work, some of those expenses might have included GST or HST from a participating province.
If so, you may qualify for a GST/HST rebate, if you deduct them on your income tax return, and your employer is a GST/HST registrant. Only certain employment-related expenses are eligible.
Your employer will need to approve them and sign a Declaration of Condition of Employment. Instead of filing this form with your tax return, you are supposed to keep it and just be able to provide it to the Canada Revenue Agency (CRA) if you are asked to.
You should file expenses in that year’s tax return, as well as file a Statement of Employment Expenses form. You calculate your eligible expenses that can be deducted on the current year’s return, plus identify any that are to be carried forward on future returns. You will also need to complete a GST370 Employee and Partner GST/HST Rebate Application form in order to apply for the rebate. You can only file one application per year.
What Is Eligible Under the New Housing Goods and Services Tax / Harmonized Sales Tax Rebate?
You may qualify for a housing rebate up to $30,000 if you bought a brand new home or had major renovations, additions or rebuilds.
This includes if you purchased any newly built home, condo unit, or shares in a cooperative housing unit. You may also be eligible if you built your own house, or had a contract to have your new house built by someone else.
If you completed a substantial renovation, or had a major addition to your home built, either by yourself or a contractor, this renovation or addition may be eligible. To classify as a substantial renovation, about 90% of the interior must be reworked. For costs from major additions to qualify, the additions must double the living space.
If you have rebuilt a property destroyed by fire, or converted a non-residential property into your home residence, you may also qualify for the rebate.
Be sure to keep all receipts for any renovations or for federal and provincial taxes or provincial land transfer taxes, and file with your application for rebate.
GST New Residential Rental Property Rebate (NRRP)
Note that Ontario also offers an NRRP rebate for owners who purchase a newly-built house or condo and are planning to use the real estate for rental properties as an investment property.
How Can You Apply?
You have up to two years to apply for new housing rebates. You will need to submit a calculation of your rebate, as well as an application form. You will need to be able to provide a proof of occupancy to show it is your main residence. Payment is usually received within six months. The Government of Canada website has the rebate forms and information on how to fill them out.
What Can You Receive?
If you think you are eligible to receive a GST/HST rebate, Sproule + Associates’ has a GST Rebate calculator that you can use to see what you could receive.
Sproule + Associates can help you get the full rebate amount you are owed, and make the entire process easy and stress free. We provide professional advice and services, personalized to you.