Present Focus Devadas Law Professional Corporation

HST Rebate on New Home / Condo Purchase:

To qualify an individual in the last two years should have;

Purchased a newly built home from the builder

Purchased a new condominium from the builder

The Ontario HST rebate for new homes is available to anyone in the province who purchases a new home or condo from a builder. Since the program is only retroactive to two years from the date of completion of construction, it is important that you take advantage of this program and be eligible for a refund. 

This is available to the purchaser only in the case of new housing that will be the primary residence of the purchaser or of a relation of the purchaser. A relation is defined as an individual related by blood, marriage, common-law partnership, or adoption. Blood relation is limited to parents, children, other descendants, or siblings. Relation by marriage includes a spouse or a person who is connected to the spouse by blood or adoption.

Purchasers of investment properties and second homes (such as cottages) will not qualify for the rebates if the new home is not intended to be the primary place of residence of the purchaser or a close relative.

However a residential landlord purchasing or building a newly constructed or substantially renovated residential building for rental purposes may be eligible to claim the “new residential rental property (NRRP) rebate”

As of July 1, 2010, subject to transitional rules, the sale price of every new home in Ontario is subject to HST of 13%. This comprises of the federal GST of 5% and the provincial Ontario RST of 8%.

The federal GST New Housing Rebate is 36% of the GST payable (at 5%) on the first $350,000 of the purchase price, with the rebate declining between $350,000 and $450,000. The rebate is eliminated entirely when the price reaches $450,000. The Ontario HST New Housing Rebate consists of 75% of the 8% RST component i.e. the rebate is 6% of the sale price of the new home. The Ontario HST rebate applies to the first $400,000 of the sale price, and therefore has a maximum amount of $24,000. Where the price of a new home exceeds $400,000, the Ontario rebate is a flat $24,000. Unlike the federal GST component, the RST component does not decline and disappear after a fixed price point.

HST New Home Rebate disallowed by the CRA

The CRA has been actively challenging many GST/HST new housing rebate claims made on purchases of new homes and disallowing the rebate. Many individuals receive a Notice of (Re)assessment stating that their HST rebate claim has been denied and that they owe money to the CRA for not qualifying for the HST New Housing Rebate. The CRA also charge interest on the outstanding amounts from the relevant date.

We help to obtain the New Housing HST Rebate for individuals who have been disallowed by the CRA.

We also help you to obtain the GST/HST New Residential Rental Property Rebate if you bought or built a house or other building that you intend to lease to individuals as a place of residence.