Background Information on the HST Rebates
In July 2010 Harmonized Sales Tax (HST) came into effect to replace the existing Goods and Service Tax (GST). Immediately taxes on new homes and condominiums increased from 5% to 13%.
The GST/HST new housing rebate allows homeowners to recover some of the goods and services tax (GST) or the federal part of the harmonized sales tax (HST) paid for a new or substantially renovated house that is for use as the individual’s, or their relation’s, primary place of residence. The New Residential Rental Property Rebate reduces this increased tax burden on Investors. This rebate program that allows Investors to receive up a rebate of up to $30,000 in HST paid on their new investment property.
If you paid HST to buy, build, or substantially renovate a house located in Ontario, one of the new housing rebates may be available for the provincial part of the HST whether the GST/HST new housing rebate for the federal part of the HST is available or not.
HST New Housing Rebate - Newly Built Homes
If you personally built a custom home or had a professional build one for you within the past two years, you may be eligible for an HST rebate up to $16,080.
If you purchased and paid HST on land where you then built a custom home, you could be looking at an HST rebate of up to $24,000.
You must file your rebate application within 2 years of move-in or substantial completion to quality.
HST New Housing Rebate - Substantial Renovations
In addition to rebates on newly built homes, the HST New Housing Rebate also includes properties that are substantially renovated by 90% or more. According to the government, a Substantially Renovated Home is considered new so owners are also entitled to apply for the rebate.
The HST Rebate is based on a series of calculations that are directly related to the HST paid on building material, labour and subcontractor invoices to a maximum of $16,080.
HST New Housing Rebate - Major Additions and Conversions
You may qualify for the GST/HST new housing rebate when you build, or engage someone else to build, an addition to your house, along with the renovation of the existing house. The work must be so great that the result is viewed as a newly built house.
When you convert a property from non-residential use into your house, it is considered a substantial renovation, even if the extent of the work, if any, does not meet the requirements for substantial renovation. You then qualify for the GST/HST new housing rebate if you meet all of the other conditions for claiming the rebate.
New Residential Rental Property Rebate
When you purchase a residential rental property in Ontario you have to pay HST. To help owners recover a portion of this tax, the government introduced the NRRP Rebate.
The NRRP Rebate allows owners to recover some of the HST paid regardless of whether the property would not qualify for the HST New Housing Rebate. In order to qualify, a tenant must be the first to occupy the property.