HST & HST REBATE
HST is harmonized sales tax, a blend of federal and provincial tax. Buying real estate is fun and exciting but as soon as you hear HST there is confusion. Why do I have to pay HST on my home purchase? In general terms, you have to pay this tax only on a new home purchased from a builder and not on resale home but it is not as simple as that.
New condo and home developers already factor in the HST rebate into their prices assuming the purchaser is going to live in his or her home. If the purchaser is buying as an investment then this rebate is added back. So, who can receive HST rebate in Ontario? Both the end user as well as investor purchasing a new build house or condo can receive HST rebate. Also, a buyer who buys a newly built residence that was never lived in can also receive the rebate.
If you are an end user buying a pre-construction home in the Greater Toronto Area, you will automatically receive the HST rebate as most developers already factor in the rebate into their pricing. Also, if this new property is sold within the initial 1-year window the CRA will require you to pay back the HST rebate in full.
Important Tip to Remember
It is critical to take all steps in claiming the new home as your principal residence. This includes changing address on your driver’s licence, changing utilities in your name. Also, only someone directly related to the new home buyer can occupy the property in order to claim it as principal residence. For example, children, parents, siblings, spouse or common law partners. Other relations like uncles, aunts, cousins are not considered at directly related.
We will take a deeper look into how HST rebate works in the next part.
If you are looking to buy a pre-construction condo and need help with it, feel free to contact me at 647-834-9928 or send an email to firstname.lastname@example.org