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The HST New Housing Rebate (or HST new home rebate) is available to an individual who buys a new home (or a substantially renovated house) from a builder or hires a builder to build a home for them on their existing property. For such purchasers, there are two components to the HST New Home Rebate: the federal and provincial portions of the rebate. For the 5% federal portion of the HST, the HST new home rebate is clawed-back for homes with a purchase price above $450,000.
Ontario, on the other hand, has its own HST new home rebate, called the HST New Housing Rebate that applies to the provincial portion of the HST (8% part) on new or substantially renovated homes used by the purchaser, or their relatives, as a primary place of residence. The HST new home rebate for homes purchased in Ontario is currently available up to $24,000 with no claw-back for the provincial portion of the HST.
HST New Home Rebate for Rental Property
Similar to the HST New Home Rebate described above, there is also an HST rebate in Ontario for real property that is purchased for use as an investment property (i.e., rental property). In Ontario, the HST New Home Rebate for a rental property can be as much as $24,000.
There are strict deadlines to apply for the HST New Home Rebate. The general rule is that the purchaser must apply for the rebate within 2 years of their purchase or date of occupancy. What constitutes the occupancy date can be tricky and purchasers should be weary.
HST New Home Rebate disallowed by the CRA
The CRA has been actively challenging many HST new home rebate claims made on purchases of new homes and disallowing the rebate. Many individuals will have received a Notice of (Re)assessment that states their HST rebate claim has been denied and that they owe money to the CRA for not qualifying for the HST New Home Rebate. The CRA will also charges interest on the outstanding amounts from relevant date.
Our Tax Lawyers are experts in HST laws and have successfully represented our clients before the CRA and the Courts. Please Contact Us to speak with a tax lawyer immediately.
You can also visit the following government website to learn more about the HST New Home Rebate: