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The HST New Housing Rebate is a tax rebate available to a purchaser of a new home or an existing home that has been substantially renovated home. There is also an HST Rebate for an Owner-Built Home. The HST rebate can be upwards of $30,000.
The HST New Home Rebate has two components – the federal and provincial portion. There is the 5% federal portion of the HST and, in Ontario, an 8% provincial portion for a total of 13% HST.
The HST new home rebate for a home purchased in Ontario is currently available up to $24,000 with no claw-back.
HST New Home Rebate for Rental/Investment 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.
The CRA will send a Notice of (Re)assessment which will disallow the HST New Housing Rebate and demand that it be repaid to the CRA. The CRA will also charges interest on the outstanding amounts from the relevant date.
You can also visit the following government website to learn more about the HST New Home Rebate:
Our Tax Lawyers are experts in HST laws and have successfully represented our clients before the CRA and the Courts.
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