Why Was I Denied An HST Rebate Ontario?

Placing wooden blocks spelling the word "Rebate"

Has Your GST/HST New Housing Rebate Application Been Denied?

The purchase and sale of a residential property can be a stressful time for home buyers. As some might already know, a buyer who is looking to purchase a brand new or substantially renovated home may be entitled to the GST/HST New Housing Rebate, which is also frequently referred to as the New Home Rebate. However, there are few conditions that must be met in order for one to be eligible for it.

When you receive a denial for the HST Rebate, that usually comes in the form of a Notice of Assessment. Being denied essentially means that the Canada Revenue Agency has determined you do not qualify for the rebate, or simply that paperwork was not submitted correctly. Before you give up on being paid, it’s important to do your own due diligence and search for answers as to why you haven’t been able to recover the value of the rebate, as outlined in the agreement.

Here is what you need to know about the GST/HST New Housing Rebate and a few key reasons as to why your rebate application may have been denied.

How Do You Qualify For The HST Ontario Rebate?

You may be eligible to recover the federal and provincial portion of the New Home rebate if you have done any of the following in Ontario:
New family smiling while pretending to play house

The Home Must Be Your Primary Place Of Residence

As per the excise tax act of the HST New Housing Rebate, a new home or substantially renovated home must be used as the primary place of residence by the buyer or their immediate family member. This member must be related by blood, marriage, common-law partnership or adoption or within the meaning of the income tax act, such as a spouse, parent or child.

The CRA has specific considerations when it comes to determining whether or not a residential property is a person’s primary place of residence. These factors include:

Does A Rental Property Qualify For the New Housing Rebate?

Even if you believe you are eligible for the rebate based on other conditions, it is important to recognize that the New Housing Rebate only applies to principal residences that were newly-built by the owner or substantial renovations to an existing residence. Buyers of rental properties must apply for the New Residential Rental Property Rebate. A buyer will also be denied for cottages or any secondary residences.

Frustrated homeowner holding "Help!" sign over stack of rebate applications

Why Did The Canada Revenue Agency Deny Your Rebate Application?

As mentioned above, there are many different requirements and conditions for the GST/HST New Housing Rebate. Let’s go over some of the reasons as to why your application could have been rejected and what you can do to amend this.

1. Your Application Was Not Filled Out In Full

While this may not seem like a big issue, having an incomplete application can cost you both time and money. It’s important to contact a professional from the onset so that they can help determine whether the construction of your home falls under the legal requirements of the rebate. Many experts will even offer a free consultation. At Sproule + Associates, you don’t pay until you get paid by the CRA.

2. Your Rebate Calculation Is Incorrect

Again, it is crucial to ensure that all paperwork for rebates is accurate and complete. When you hire a tax expert who offers comprehensive services, you will have peace of mind knowing that your application will be correct the first time around. And you also don’t have to worry about having to search for answers as to why your rebate was rejected – they will offer you an explanation and give you an accurate value of the rebate that you can expect.

3. The Deadline For Filing Has Passed

If you want to ensure you receive your claim credit, you must act fast as you only have two years to submit your application. For example, if you finish building or renovating a Toronto home in April of 2020, you must file for your HST Rebate in Ontario by April of 2022.

4. Supporting Documents Were Not Submitted

Whether your home is new or substantially renovated, the CRA requires all relevant paperwork. This includes GST191, GST191 WS, and RC7191 forms.

5. You Don't Qualify For The Provincial Or Federal Portion

This simply means that the CRA believes you’re not eligible based on the conditions they have set out, whether this means that the home is not your primary residence under the income tax act.
File folder holding Notices Of Objection for denied HST rebate

You Can File A Notice Of Objection

The GST/HST New Housing Rebate is intended to assist Canadian home buyers to recover a portion of the federal and provincial Goods and Services Tax and the Harmonized Sales Tax spent on real estate. If the CRA denies your application, don’t lose hope. Sproule + Associates will be more than happy to assist you in submitting a Notice of Objection. Contact us today for more information and a free consultation.

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Interested in finding how much you can get back?

If you've recently undergone substantial renovations, built or hired someone to build an addition, built or hired someone to build a new home, or purchased a new residential rental property, you can receive money back from the government. Use our free calculator to find out how much you qualify for.

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