HST New Housing Rebate in Ontario

The Ontario HST rebate for new homes is available to anyone in the province who purchases a new home or condo from a builder, or who hires a builder to construct a new house. When purchasing a new home or condo to live in, or for a family member to live in, the Ontario HST rebate is frequently assigned to the vendor upon closing who consequently lowers the purchase price by the rebate amount. This allows the home builder or condo developer to effectively advertise a lower "sticker price", increasing sales, and enables a buyer to qualify more easily for a mortgage large enough to afford the property.

Ontario New Residential Rental Property Rebate (NRRPR)

When purchasing a new condo or home to rent out, the Ontario NRRP Rebate can only be applied for by the buyer after closing and never by the vendor. This creates an additional financial burden on anyone buying a brand new rental property as they are forced to pay the full purchase amount including HST upfront and eat the interest costs until he or she is granted the rebate. For this reason, anyone who buys a new home or condo as an investment property should promptly apply for the rebate.

NRRP Rebate and HST Rebate Application Service

If you recently bought a new house or condo and did not transfer rights to your new home rebate to the builder in exchange for a lower purchase price, our team of professionals can help you obtain a rebate of up to $30,000 today! We have processed over $10 million of new housing rebates for people like you, and we do not charge a single dollar until after a non-taxable new home HST rebate cheque in your name is issued by the Government. Applying for the rebate on your own can be difficult and confusing; our trusted service ensures you receive your maximum eligible rebate as fast as possible.

We offer FREE comprehensive consultations, so call us now to find out how large a refund you are eligible to receive!

Why Does Ontario Rebate HST on New Homes?

Harmonized Sales Tax was implemented in Ontario on July 1, 2010, which raised the tax on new homes in the province from 5% (GST) to 13% (HST). In an effort to help homeowners deal with the increased cost of buying a new home, the Government introduced a rebate program to reimburse buyers for a portion of the additional new home tax.

Ontario HST Rebate New Home Eligibility

You may be eligible for an HST rebate of up to $30,000 if you have done any of the following in Ontario:

• Purchased a newly constructed home
• Purchased a new condo
• Built a house
• Contracted someone to build a house
• Substantially renovated a house or condominium
• Contracted someone to extensively renovate a home or condo
• Added a major addition to a home
• Rebuilt a home that was destroyed by fire
• Bought shares in a newly constructed cooperative housing project
• Converted a non-residential property into a home

What is the Maximum New Housing HST Rebate Possible?

As of summer 2010, new home buyers in Ontario are charged 13% HST on their purchase, which consists of a 5% federal tax and 8% provincial tax. The new house HST rebate in Ontario essentially kicks back 75% of the Ontario portion of the HST, up to a new home purchase amount of $400,000. This results in a maximum rebate at a provincial level of $24,000 ($400,000 x 0.08 x 0.75). It is also possible to obtain a federal rebate of up to $6,000. In other provinces, the new home rebate is clawed-back for any house purchase over $450,000. This is not the case in Ontario, however, where the provincial rebate is never clawed back it simply only applies to the first $400,000 meaning the largest rebate possible even for a million dollar home is $24k provincially. The maximum rebate possible federally is an additional $6,000.

How Long Does It Take To Receive The HST Rebate?

NRRP rebates and new housing HST rebates are typically received from the Canada Revenue Agency (CRA) within two months. Rebates can be as fast as four weeks, but can occasionally take up to six months to process. We have a list of documents and information required from the homeowner in order to prepare the rebate application on their behalf. We review all expenses and supporting documentation to ensure eligibility before we submit a claim to the CRA.

HST Rebate New Home Deadline

The Ontario new home HST rebate or NRRP Rebate must be filed within two years of a new home or condo closing. If you are applying for an HST renovation rebate, you have up to 2 years to apply following the completion of construction.

Primary Residence Requirement

To be eligible for the HST home rebate, a new house or condo unit must be used as the primary place of residence by the purchaser or their immediate family (meaning people related by blood, marriage, common-law partnership, or adoption). There are a number of factors considered by the CRA when determining whether or not a house is a person's primary residence. These factors include how long the individual has lived in the unit, whether the person considers the house as their main residence, and if they have used that address on any personal or public records such as a driver's license. Home and condo builders in southern Ontario typically credit the total amount of a buyer's HST home rebate towards the purchase price of the house. In rare circumstances, the builder will pay the rebate directly to the purchaser. This can provide the buyer with enough money to furnish their new property without requiring a cash back mortgage.

HST Rebates on New Homes with More Than One Buyer

A recent story in the Toronto Star highlighted a large number of people in Ontario that are receiving demands from the Canada Revenue Agency to repay the HST new-home rebate they received upon closing on their real estate purchase. The claim typically arises when a third party has been added to a home or condo's title at the insistence of the mortgage lender. According to the CRA, the Excise Tax Act says that if even a single registered buyer does not qualify for the new home HST rebate, then all the buyers are disentitled. One news story on thestar.com quotes a real estate lawyer from Vaughan explaining that several of his clients have been dinged for more than $26,000 each (the maximum rebate amount plus interest) because an uncle or aunt was registered as a 1% owner to help the buyer(s) qualify for a mortgage. The problem is, an uncle or aunt is not considered a "close relative" according to the CRA, which means that if their primary address is not also the unit in question, then no one officially qualifies for an HST rebate.

If you purchase newly constructed real estate in Ontario and want to qualify for the HST rebate new home program, you must use the property as the primary place of residence for yourself or someone closely related to you such as a child, grandchild, brother, sister, or someone you are related to by marriage or common-law partnership. Friends, business associates, and even uncles, aunts, nephews, nieces, and cousins are all excluded from eligibility. If anyone that fits into this excludable category owns even a small percentage of your new home or condo, you are not eligible for the HST new home rebate. It is not possible to receive an allocated percentage of the rebate based on how much of the real estate you own; either everyone qualifies for the rebate or no one does. If you did receive an Ontario HST new housing rebate even though one or more of the individuals listed on the title will not be living at the residence and are not closely related, it is advised that you contact the CRA immediately. When the CRA eventually flags the transaction (which they likely will), you will be charged interest on the total amount of the refund which can add up quickly. For this reason, it is best to solve the issue immediately rather than accrue thousands of extra dollars worth of interest.

People allowed to receive the new home rebate even if the property is not their primary residence:

• Spouses
• Parents
• Grandparents
• Siblings

People disqualified from receiving the HST rebate if the home or condo is not their primary residence:

• Aunts
• Uncles
• Cousins
• Nephews
• Nieces
• Friends
• Business Associates

The CRA allows "voluntary disclosure," which means if you made a mistake and requested an HST rebate for a new home and were not actually eligible, you can correct the problem before it becomes a more serious issue. It is possible to buy a new condo in downtown Toronto with the idea of living it, but then something in your life changes and you end up selling it very soon after taking possession. When you closed on the unit, you considered it to be your primary residence, so you claimed the full HST new condo rebate that you were entitled to, but the fact that you sold it soon after makes the purchase look like a buy and flip in the eyes of the CRA.

According to several Canadian newspapers, the C.R.A. has been actively challenging HST new home rebate claims made on purchases of new homes and new condos and disallowing the rebate if the applicant did not follow all the rules. If anyone is listed on the title (even just for mortgage qualification reasons) that does live on the premises and is not "closely related", no rebate will be issued. Likewise, if you do not properly apply for the HST rebate on rental property (NRRPR), you could retroactively receive a Notice of Assessment or Notice of Reassessment from the CRA that states your HST rebate claim has been denied and that you owe money for not qualifying for the rebate. The new residential rental property rebate requirements state that a tenant must have signed a lease for the investment property owner to qualify. The CRA also charges interest on all outstanding amounts, and has been very successful when challenged in tax court, so always make sure you understand all the rules and regulations before applying for a new property rebate. Many tax audit lawyers and accountants expect the CRA will become increasingly aggressive at checking rebate compliance due to government budget shortfalls after the COVID-19 pandemic.

Is The Home Builder or Condo Developer Charging Me HST?

In an effort to lower the "sticker price" of a newly constructed condo or house, the builder or developer will often incorporate the rebate into the listed price of a new home or condo. In this scenario, the rights to the proceeds of the new housing rebate are transferred to the developer upon signing the purchase agreement, and in exchange, they deduct the HST rebate amount from the purchase price. Essentially, the vendor is lending the buyer money knowing they will be paid back when they buyer's HST new housing refund is issued. This scenario is very commonplace since it lowers the purchase price for the buyer, and relieves them from the headache of having to file for the refund themselves.

There are two components to the new housing HST rebate in most provinces, the federal portion, and the provincial portion. In Ontario, however, the rebate only applies to the provincial portion of the HST, which is 8%. Having a condo developer or home builder apply the maximum HST rebate for new homes to your purchase allows you to borrow the least amount of money possible to afford the property. Rather than taking out a larger mortgage to cover the house, townhome, co-op, or condo's full cost including HST, your mortgage only has to cover this amount minus the amount of your H.S.T. rebate. If the price of the new house or condo includes a deduction of the HST rebate amount, however, you will not be eligible to apply for the rebate on your own since the rights to it belong to the vendor.

HST Rebate for New Condo Flippers

The intention of a buyer affects their eligibility for a rebate according to the recent court case Wong v. Her Majesty the Queen. A buyer must have bought the property with the intention of using it as their primary residence or the primary residence of a close relative. The buyer's intent only matters at the time of the initial purchase, not at any later time. This means that an individual who purchases a new condo to flip it for profit is not eligible for a rebate since the condominium was never intended to be their primary residence. The exact amount of time that a purchaser must reside in a home in order to be granted the rebate is handled on a case-by-case basis and the main determining factor is how legitimate is the claimant's usage of the property as his or her primary residence.

Misrepresentation

There have been many stories in the news lately about purchasers of new condos in Toronto pretending the units are going to be their primary residence in order collect the HST rebate on new homes. Although it is the condo builder who technically pocketed the HST rebate from the Federal Government after the rights to it were transferred, the CRA comes after the condo buyer since they were the ones offside on their taxes. A significant number of the condo flippers that were incorrectly claiming HST new condo rebates were purchasing first phase pre-construction condos and then selling them as soon as they were built. While this strategy has paid off handsomely in the Toronto area, the Canada Revenue Agency is now coming after these individuals for the HST rebates they erroneously received as well as interest and penalties.

Owner-Built Home Rebates

When it comes to owner-built homes, the maximum Ontario HST new home rebate amount depends on whether or not the person paid the provincial part of the HST when he or she purchased the land upon which they constructed or extensively renovated a property. If the person paid the provincial portion of the HST when they bought the land, the rebate will be equal to 75% of the provincial portion of the HST paid on the land as well as eligible construction costs, up to a maximum 24 thousand dollars. If the person did not pay the provincial portion of the H.S.T. when they bought the land, the rebate is equal to 75% of the provincial part of the HST paid on eligible construction costs only, up to a maximum amount of $16,080. It is also possible to obtain a tax rebate for new housing from the Federal Government of up to $6 thousand.

Taxable Self-Supply

A person is considered to have sold and then repurchased a property, also called a taxable self-supply, either on the date the substantial renovation is complete or on the date possession of the home or condo is given to a person under a lease, whichever is later. On the date that the self-supply occurs, the HST applies, and the person will be considered to have paid and then collected the HST on the fair market value of the home. You must file the new home HST refund application or HST rental rebate application within two years of the self-supply date to be eligible for a refund.

Does The HST Housing Rebate Apply to Cottages?

The HST rebate only applies to principal residences and rental properties. This means that recreational properties such as a cottage do not qualify for a tax refund.

HST Rebate for New Homes on Leased Land

Eligibility for the provincial new home HST rebate in Ontario does not require you to own the land underneath your new home. Consequently, people who purchase a brand new mobile home or modular home located on land that they rent or lease can still be granted a new housing HST refund.

When Can I Apply For the HST Rebate on New Homes?

When building a home, you can apply for the NRRPR or HST rebate as soon as construction is more or less complete and you, a close relative, or a tenant is occupying the property. When buying a brand new home or condominium, you can apply for the HST or NRRP Rebate as soon as you close on the property. When renovating a property, you can apply for an HST Ontario rebate or NRRPR once you are almost done the work provided you, a close relative, or a tenant is living in the property. It is suggested that you wait until 100% of the work has been completed, however, since you can only apply once, so it is important that you maximize the value of the rebate by including every last renovation. People who buy a new condo, co-op apartment, townhome, house, duplex, triplex, fourplex, or other investment property to rent out can only apply for the HST new residential rental property rebate if they have a tenant sign a lease for the unit.

Ontario Tax Rebate for First-Time Home Buyers

In Ontario, there is a land transfer tax levied on the purchase of every home or condo in the province. The Ontario land transfer tax is 0.5% of the first $55k, 1.0% of the next $195k, 1.5% of the next $150k, 2.0% of the next $1.6 million, and 2.5% of the remaining amount above $2 million. Beginning January 1st, 2017, the maximum possible land transfer tax rebate for eligible 1st-time buyers will double to $4,000. This means eligible first-time home buyers will not be required to pay any provincial land transfer tax on the first $368,000 of the home or condominium's purchase price. In addition to helping eligible buyers claim new housing HST rebates, we can help eligible first-time home buyers claim their Ontario land transfer tax rebate.

Ontario Now Requires Citizenship and Residency Information

As of April 2017, homebuyers in Ontario must provide information to the Government about their citizenship and official place of residence. This is part of the Government's strategy to tackle the Toronto housing affordability crisis. According to policy-makers, the information is being requested "to support evidence-based policy development." The Prescribed Information for Purposes of Section 5.0.1 Form is incorporated with the land-transfer tax documents, and requires the following info:

• Type of dwelling (condo, semi-detached, detached, cottage, etc.)
• Intended use of property (investment, principal residence, etc.)
• Residency and citizenship status of purchaser
• Identity of company owner (if purchased by a corporation)
• Identity of beneficial owners (if property is purchased on behalf of a third party)

Anyone who fails to complete the form correctly may face financial penalties.

2022 New Housing HST Rebates in Ontario

The Canadian Government encourages people to own a house, and as of 2022, close to 70% of Canadians owned their home according to a national household survey. Millions of people in Canada also own a second property, often a cottage or investment property. In real estate markets such as Toronto and Ottawa that have a significant amount of home buyers that are new to the country, many people buying or looking to buy are unaware of the new condo HST rebate. People acquiring brand new property in the GTA for investment purposes pay tens of thousands of dollars in HST, so it is very important that they file for a new house rebate otherwise they will not get a single dollar back. Many new Canadians are unaware of the rebate since they are not always familiar with the Canadian property market and tax code, but in most cases their real estate agent will advise them of the rebate during the purchase process. Our HST new home rebate service applies to everyone in Ontario provided they did not assign their new housing rebate (NHR) to the home builder. If you live in Toronto, Ottawa, Mississauga, Brampton, Hamilton, London, Markham, Vaughan, Kitchener, Windsor, Burlington, Sudbury, Oshawa, Barrie, St. Catharines, Cambridge, Kingston, Guelph, Thunder Bay, Waterloo, Brantford, Pickering, Niagara Falls, Peterborough, Sault Ste Marie, Sarnia, North Bay, Belleville, Cornwall, or any other community in Ontario, our convenient new home HST rebate service is available to you!

Bought a new home or condo lately and did not give the vendor rights to your HST rebate? Phone our team of professionals now for a free consultation!