HST Rebates for Purchasers of Properties from a Builder
Everyone has heard of the old adage, there are two things that one can be certain of taxes and death.
If you are purchasing a used or pre-occupied home, HST will not be applied. However, if you are purchasing a newly constructed home from a builder, the price would be subject to HST.
HST New Housing Rebate
Typically, the New Housing Rebate is assigned to the builder when the deal closes.
In order to qualify for the new housing rebate on a residential unit, it must have been purchased for use as a “primary place of residence of an individual or a qualifying relative”
The New Housing Rebate allows Purchasers to recover some of the federal portion of the HST. Which is currently 5% in Ontario.
- Homes with a base price (excluding HST or rebates) up to $350,000 – a purchaser can recover 36% of the 5% federal portion.
- Homes with a base price (excluding HST or rebates) between $350,000 – 449,999 there is a sliding scale that the purchaser can recover.
- Homes with a base price of $450,000 or higher, the federal portion of the New Housing Rebate is not available.
With regards to the remaining 8% provincial of the HST, purchasers may recover 75% of the 8% provincial portion up to a maximum of $24,000 for properties up to $400,000.
New Residential Rental Property Rebate (“NRRP Rebate”)
Purchasers of newly constructed properties who intend to rent the property so that the first occupant of a home is a tenant are entitled to the New Residential Rental Property Rebate. However, unlike the New Housing Rebate, purchasers cannot but cannot obtain the New Residential Rental Property Rebate from the builder. In this circumstance, purchasers in must apply for the Rebate directly after closing.
The application for the New Residential Rental Property Rebate must be filed within two (2) years after the house purchase closes.
It is important to note that Purchasers will have to repay the New Residential Rental Property Rebate if they should sell their home within one (1) year after it is first occupied as a primary place of residence after construction, unless the home is sold or leased to an individual who will occupy the home as their primary place of residence.