HST & GST Housing Rebate

The Greater Toronto Area’s housing boom has been great for the local economy but many home buyers are unaware of the available HST housing rebate in Ontario and GST housing rebate in Ontario. The HST housing rebate in Ontario and GST housing rebate in Ontario is a rebate provided to home buyers to apply for a refund on GST/HST paid on their homes.

The rebate is available to home owners who have purchased a home from the builder or custom-built their own homes. It is available to those home owners who buy the property as their principal place of residence.

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 spouse’s primary place of residence, and all of the other conditions are met. In order to qualify for the Federal rebate, the total purchase price of the home must be less than $450,000 otherwise one cannot qualify to recover the federal portion of the HST paid.

If your house is located in Ontario, you may also be eligible to claim a provincial new housing rebate to recover some of the provincial part of the HST that you paid to buy the house. To qualify for this rebate, you must be someone who bought a new or substantially renovated house (including a new condominium unit) from a builder, and you meet the following conditions:

• the house is located in Ontario and is for use as yours, or your spouse/common-law partner’s primary place of residence and
• you are eligible to claim a GST/HST new housing rebate for the house, or you would be eligible if the purchase price was less than the $450,000 maximum threshold for claiming that rebate. This means that a provincial new housing rebate may be available even if a GST/HST new housing rebate for some of the federal part of the HST is not available.

The maximum Ontario new housing rebate amount that is available is $24,000, which is equal to 6% of $400,000. In essence, home buyers are paying 2% of the provincial tax in Ontario on the first $400,000 of the purchase price and 8% thereafter. The rebate amount has been capped to apply to the first $400,000. Unlike the Federal rebate however, one can still apply for the Provincial rebate on homes valued above $450,000.

Do I qualify for the rebate?

The HST housing rebate in Ontario and the GST housing rebate in Ontario is only available to individuals who meet all of the conditions for claiming the rebate. However, it is not available to individuals who co-own the housing with corporations or other partnerships because the rebate is not made available to those entities.

As an individual, you are eligible to claim the GST/HST new housing rebate if you meet all of the following conditions:

• you bought a new or substantially renovated house (this includes a condominium unit, a renovated house that has also had a major addition or a non-residential property that was converted into a house) from a builder, and you paid all of the GST/HST due on your purchase.
• the builder sells you the house and the related land on which the house is located under the same written agreement.
• when you sign the purchase and sale agreement, the house is intended to be the primary place of residence for you or your relation.
• ownership of the house is transferred to you after the construction or renovation is substantially completed.
• no one occupied the house before possession of the house is given to you and after the construction or renovation is substantially completed and
• one of the following applies: you, or a relation of yours, are the first occupant of the house; or you made an exempt sale of the house before it is occupied by anyone.
• the purchase price for the house (including the land, where applicable), plus the purchase price for a taxable assignment to you of the original purchase and sale agreement (if applicable), before tax, is less than $450,000.

While the HST housing rebate in Ontario and the GST housing rebate in Ontario relating to the purchase of a new property can get tricky, there is sufficient relief out there for both individuals seeking a new home and/or investors looking for a quick gain. However, without proper planning, one can also get stuck with having to pay HST twice and not get any form of relief to shelter the additional taxes levied.

GST/HST Returns for Businesses

The goods and services tax (GST) is a tax that applies to most supplies of goods and services produced in Canada. The GST also applies to supplies to real property and intangible property.

The participating provinces have harmonized their provincial sales tax with the GST. HST applies to the same base of goods and services as the GST. Almost all businesses have to pay GST/HST on purchases of taxable supplies of goods and services excluding Native Indians and some other ethnic groups.

Taxable Supplies Include:

• Sales of New Housing
• Sales and Rentals of Commercial Real Property
• Sales and Leases of Automobiles
• Car Repairs

• Advertising
• Taxi and Limo Transportation
• Legal and Accounting Franchises
• Hotel Accommodation

A business remits the GST/HST collected to the federal government through the Canada Revenue Agency (CRA) by filling the GST/HST returns.

Services We Offer:

• GST/HST account registration
• GST/HST Return Filing
• Minimizing tax liability

• Dealing with Unfilled and Arrears Returns
• CRA correspondence