Purchasing a new home or a condo is a real estate investment that we may consider at a certain point in our life. I certainly have. One of the biggest topics about purchasing a new home or a condo is related to the HST rebate. Ontario HST rebate for new homes is available to anyone in the province who purchases a new home or a condo from a builder, for which the eligibility is up to $24,000. Ontario HST rebate for new homes applies if you have:
- Purchased a newly constructed home
- Purchased a new condo
- Built a house
- Contracted someone to build a house
- Substantially renovated a house or a condominium
- Contracted someone to extensively renovate a home/condo
- Added a major addition to a home
- Rebuilt a home that was destroyed by a fire
- Bought shares in a newly constructed cooperative housing project
- Converted a non-residential property into a home
When you purchase a pre-construction property from a builder as your primary residence, the Ontario HST rebate is usually assigned to the builder directly upon closing, which allows the builder to essentially deduct the cost of the HST from the purchase price.
When you purchase a pre-construction property from a builder as an investor, you must pay the HST at closing and provided you have a one year lease in place, your lawyer can file for a full HST rebate, which is typically refunded 4 to 6 weeks later.
There are two different ways to get an HST rebate in Ontario for end-users and investors:
1) HST New Housing Rebate: You purchase a newly built or extensively renovated home or condo.
2) HST New Residential Rental Property Rebate: You invest in newly built rental property.
HST New Housing rebate eligibility:
- It must be your principal residence
- It must also serve as the principal residence for any co-signers of the property.
- It must be an owner occupied property for at least a year.
HST New Residential Rental Property Rebate eligibility:
- It applies to both Canadian residents and foreign investors
- It must have a one year lease in place
- The minimum rent period of one year must start from the closing date, not interim occupancy.
- The purchaser’s lawyer can fill out the HST rebate form to have the rebate issued 4 to 6 weeks after closing.
- Investors can apply for their HST rebate in Ontario up to 2 years after closing
Qualified purchasers that can receive the new home rebate even if the property is not their primary residence are:
Non-qualified purchasers from receiving the HST rebate if the home or condo is not their primary residence are:
- Aunts & Uncles
- Nephews & Nieces
- Business Associates
The HST Rebate can be a very complex matter, which requires professional advice. Please check out the CRA website for more details and feel free to contact us if you like us to connect you with our preferred real estate lawyer and/or accountant in this matter.
With love and gratitude