GST/HST New Housing Rebate
1. What is the GST/HST new housing rebate?
If you buy your home before it’s built, or if you substantially renovate an existing home, you could qualify for a rebate a portion of the sales tax. The amount of the GST/HST new housing rebate depends on the purchase price of the home, and can only be claimed if the net purchase price is $450,000 or less. While this rebate is often taken advantage of by first-time buyers, this rebate is available to all Canadians who qualify regardless of whether they’ve owned a home before.
2. Who is eligible for the GST/HST new housing rebate?
- purchased new housing or constructed or substantially renovated housing, which could include housing on leased land (if the lease is for at least 20 years or gives you the option to buy the land), for use as your (or your relation’s) primary place of residence
- purchased shares in a co-operative housing (co-op) complex for the purpose of using a unit in the co-op for use as your (or your relation’s) primary place of residence
- constructed or substantially renovated your own home, or hired someone else to construct or substantially renovate your home for use as your (or your relation’s) primary place of residence and the fair market value of the house when the construction is substantially completed is less than $450,000
Qualifying housing also includes mobile homes (including modular homes) and floating homes. For mobile and floating homes, you may have the option to treat your mobile or floating home as a purchased home or as an owner-built home when claiming your new housing rebate.
3. Which GST/HST new housing rebate you can claim?
The GST/HST new housing rebate allows an individual 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, when all of the other conditions are met. Additionally, other provincial 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.
In certain circumstances, a transitional new housing rebate may be available in addition to any GST/HST new housing rebate and provincial new housing rebate for which you may be eligible, even if the house is not your primary place of residence.
♦ Owner-built houses
- built, or engaged someone else to build, a house on land that you already owned or leased
- substantially renovated, or engaged someone else to substantially renovate, your existing house (at least 90% of the interior of the existing house must be removed or replaced to be a substantial renovation)
- renovated, or engaged someone else to renovate, your existing house and built, or engaged someone else to build, a major addition to your house that at least doubles the size of the living area of the house (for example, the addition of a full second story to an existing bungalow. Adding a sun porch, sun room, family room, or bedroom by itself is not a major addition)
- converted a non-residential property into your house
- purchased a new or substantially renovated mobile home or a new floating home from a builder of the home (this includes the manufacturer or vendor of the home) or you or someone you hired substantially renovated such a home. For a mobile or a floating home, you have the option of claiming either the owner-built new housing rebate or the new housing rebate for a house purchased from a builder
♦ House purchased from a builder
- purchased a new or substantially renovated house (building and land) from a builder
- purchased a new or substantially renovated mobile home or a new floating home from a builder (this includes the manufacturer or vendor)
- purchased a share of the capital stock of a co-operative housing corporation (co-op)
- purchased a new or substantially renovated house from a builder where you leased the land from that builder under the same agreement to buy the house and the lease is for 20 years or more or gives you the option to buy the land
If the builder who sold you the home does not offer you the rebate, you have to apply within two years from the date you purchased the home to apply for the rebate from the CRA.
4. How do I calculate the GST/HST New Housing Rebate in Ontario?
First, we’ll say that the home you purchased was valued at $320,000. Now in some cases, the builder of your home will have already included the HST in the purchase price. The only difference here is that you’ll be able to automatically include the purchase price plus HST amount in your mortgage. However, in all other cases, you’ll pay whatever HST rate is applicable in your province or territory (13% in Ontario) on top of the $320,000 pre-tax price:
$320,000 x 13% = $41,600 ($16,000 GST portion of HST and $25,600 provincial portion of HST)
Next, we’ll calculate the value of the rebate that can be claimed. In this case, it’s 36% x $16,000 ($5,760) for the GST portion of the HST and 75% x $25,600 ($19,200) for the provincial portion of the HST. That adds up to $24,960.
It’s important to note that for new homes in Ontario, the maximum rebate amount for the provincial portion of the HST is capped at $24,000. It’s the maximum amount available on any new home valued at $400,000 or more.
For more details please contact ☎647-720-2220.
5. What information to include with the rebate application and what records to keep?
♦ Documents you have to send CRA
In most cases, there is no requirement to submit supporting documentation with your application. However, you do have to send invoices with your worksheet where the vendor did not charge the GST/HST on the invoice (photocopies of these invoices will be accepted). You also may be contacted and requested to submit proof of occupancy.
♦ Documents you have to keep
Keep a copy of the completed forms. You also have to keep all your original invoices and the other documents you used to complete the forms for six years in case we ask to see them.
Only original invoices in the name of the claimant or the co-owners are acceptable. CRA does not accept photocopies, credit card or interac slips, or account statements, without the original invoices. CRA does not accept estimates or quotes as proof. If we ask you to send your invoices to CRA, they will return them.
Canada. Revenue. Canada Revenue Agency. 14 Sept. 2016. Web. 9 Aug. 2017. <https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-home-construction/gst-hst-new-housing-rebate.html#eligibility/>.
Sara, Lian. “What is the GST/HST New Housing Rebate and How Does It Work?” Ratehub. 16 July 2016. Web. 9 Aug. 2017. <https://www.ratehub.ca/blog/what-is-the-gsthst-new-housing-rebate-and-how-does-it-work/>.