Understanding the Basics of the HST Rebate for your New Home or Investment

The Canadian Revenue Agency’s HST Rebate program has been in effect since July 2010 when the CRA introduced HST generally in Ontario. HST is charged on all new build properties in Ontario, so all properties that are purchased as preconstruction from a developer have HST applied to them. The purpose of the HST rebate is to discount a percentage of the HST on the purchase of new build properties for those purchasing as their own home or for investment, provided certain eligibility criteria are met. To make things more complicated, purchase agreements usually include the non-rebateable portion of the HST in the sticker price. The remaining portion of HST is due on closing. The HST is always paid in full. This amount varies and is weighted based on the purchase price of the new build (Call us at HST Relief to give you a free consultation on how much HST you owe on closing – 1.866.832.1990). The mains question real estate purchasers have are: Who pays the remaining HST due on closing? And, under what circumstances is one eligible to get the portion of HST paid on closing back though CRA’s HST rebate program?
 

Who pays the remaining HST due on closing?

 
If the new build property purchased from a builder will be used as the primary residence for all those who are on title of the property, then the builder will pay the HST for the client on closing. The standard purchase agreement is written such that it assumes the purchaser will be using the property as a primary residence and there is a build in assignment of the HST rebate to the builder. In this case, the builder pays the HST on closing for the purchaser and reclaims it themselves through CRA. The net effect for the purchaser as a primary residence is that they owe nothing on closing in terms of HST. The situation is different if the new purchase will not be a primary residence. In that case, the purchaser will owe this portion of HST due on closing along with all other closing costs.
 
If you are concerned about the HST due on closing, please call us for a free consultation. HST Relief can inform you of what to expect and tell you about our loan and bridge financing services to cover the HST you will need. HST Relief was founded by real estate investors and a mortgage broker who have 15 years’ experience in the real estate finance industry. Call us to find out how we can lend you the cash you need to close your investment properties.
 

Who is eligible for the HST Rebate?

 
Anyone who closes a new build investment property as a primary residence of the purchaser(s) or with a 1 year lease are eligible to file for the HST rebate (some exceptions apply – call us for more details on your specific situation). In the case of a primary residence, the builder credits the purchaser the HST New Housing Rebate upon closing. Investors are eligible to reclaim the HST they paid on closing through the New Residential Rental Rebate Program. To file for this, investors need a 1 year lease with a tenant for the new construction property. There are several traps that CRA uses to deny issuing the rebate, so it is important to speak to an expert before closing the property and before attempting to file. Call us for more information on how we can obtain your rebate of up to $30,000 today. For more online reading, check out our clients’ FAQs with our team’s detailed answers posted here.

IS HST deductible on a new home or condo purchase in Ontario?

Hi,
 
My question is - for a new home purchase, is there a tax deductible that we can use that reduces the amount we have to pay?  I know there is HST due on this transaction.  How do we deduct it or get a rebate?

Answers

By HST Relief (Admin)
Good question.  The answer is yes, there is something called the HST New Housing Rebate and other HST rebate programs for new construction real estate, that depend on how you are using the new construction property.
 
If you move in to a new construction property as your primary residence, then the builder will credit you the HST New Housing Rebate upon closing.  You will not owe anything additional on final closing.  If the property is not going to be used as your primary residence, then you will owe the Rebate portion of the HST on final closing (this amount is usually in the neighbourhood of 7.8% of the purchase price) and you will have to file to get it back.  There are conditions, such as having a 1 year lease with a tenant.
 
HST Relief specializes in filing these types of HST Rebates.  We also lend the HST due on closing so that investors can successfully close on their properties and when we get your HST paid back from CRA, you can pay off the loan.  Call us for more specific questions - 1.866.832.1990  info@hstrelief.ca
 
 

Do banks finance HST for investment properties in Canada?

I bought a new construction condo in North York and I am getting ready for the building's registration.  I am wondering, which banks will help me finance the HST to close the property?  I have a mortgage with TD bank, but they will not help me with the closing costs nor the HST due.  Who should I contact?

Answers

By HST Relief (Admin)
That's right - the major banks are mandated not to lend for tax related reasons.  So, they will not help you with your closing costs for HST.  Our company will lend the rebate portion of the HST that is due on final closing so that you can successfully close your investment property.  Then, we will file to get your HST back to pay off your loan.  It works as a sort-of bridge financing until CRA grants you the rebate.  This is an important service as many investors fear they cannot close on the property without an additional 17-20k in HST.
 
Cal us for more information - 1.866.832.1990 or info@hstrelief.ca  

Government rebate on investment property

Hi - 
 
I bought a new construction condo.  I've loosely heard about government rebates that I maybe can get for my investment property and new condo that was just built.  Can you please explain these HST government rebates and how they apply to me in Ontario?

Answers

By HST Relief (Admin)
Hi Kgirl,
 
Yes, the HST Rebate is issued to investors who purchase new construction properties, if they paid the HST rebate portion due on closing and are eligible for the rebate.  Those who use their new construction properties as primary residences don't pay the rebate portion on closing and therefore, do not qualify for money back from the government.  
 
If you have purchased a new construction house, townhome or condo and paid a portion of the HST on closing, then you are eligible for the HST rental rebate with a 1 year lease in place with a renter.  For more information about how to recover your money from CRA and qualifications for the program, please email or call us:
 
1.866.832.1990  info@hstrelief.ca

Casa 2 condo closing and how HST Relief saved me tons of money

I bought a condo at Casa 2 on Charles and Yonge Street downtown.  Hst Relief really saved my butt.  I decided not to move there for personal reasons and I ended up with a big HST bill at the lawyer's office.  I borrowed the money for just a month while their company got me the HST rebate I was entitled too.  I don't know what I would have done if they weren't there to help me get my investment set up.  I may have made a decision that forfeited my right to the rebate - so thankful to have spoken with HST Relief and to have saved my investment. Thanks, guys!  I have recommended your services to my other buddies investing in the same new construction Casa 2 project as well. 

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