Buying a new home is exciting, but did you know that you might be paying extra taxes when you buy a new build home? This can be surprising, but there's good news - you can get a rebate! The GST/HST New Housing Rebate is a government program designed to help homebuyers and landlords save money on the federal and provincial taxes paid on newly constructed or substantially renovated homes.
If you're buying a new home in Ontario, you may be eligible for a federal rebate if your property is priced up to $450,000. The provincial rebate is available for any value of property, with some restrictions. Let's take an example of a property with a purchase price of $625,000, including 13% HST, and see how much rebate you can get:
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As you can see from the table, the federal rebate does not apply to properties priced above $450,000. However, the provincial rebate is still available, with a maximum amount of $24,000.
If you're a landlord, you'll have to pay the full price on closing and apply for the rebate yourself.
Because most new builds are purchased as family homes, the price builders advertise to you is the stated price net of the rebate. This means they've already done the math behind the scenes by considering the sale price, the tax, and the rebate, all to show you one final price. However, if you're a landlord, you'll have to pay the full price on closing and apply for the rebate yourself.
To find out how much rebate you're eligible for as a landlord, you can use our calculator:
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At Lucas CPA, we can help you navigate the complex process of applying for the GST/HST New Housing Rebate. Our experienced professionals can help you understand and apply for the rebate, ensuring you receive the maximum amount available.
By understanding the GST/HST New Housing Rebate, you can save thousands of dollars when buying a new home. Don't miss out on this opportunity - contact us today!
Note: The federal rebate is equal to 36% of the federal portion of GST/HST, to a maximum of $6,300 and the Ontario provincial rebate is equal to 75% of the Ontario portion of GST/HST, to a maximum of $24,000. See the formulas for the stated price net of rebate from CRA here.
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without a specific consultation. Lucas CPA Professional Corporation will not be held liable for any problems that arise from the usage of the information provided on this page.