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HST New Housing Rebate in Ontario
Anyone in Ontario who contracts a builder to construct a new house or who buys a new home or condo from a builder, the Ontario HST rebate for new homes is issued to that person. The Ontario HST rebate is usually given to the buyer upon purchase of a new home or condo to live in, or for a family member to live in. This in turn reduces the purchase price by the rebate amount and it enables a buyer easily qualify for a mortgage large enough to afford the property. Even the home builder or condo developer can successfully advertise a lower price, thereby increasing sales of the property.
Ontario New Residential Rental Property Rebate (NRRPR)
The Ontario NRRP Rebate can only be applied for by the buyer after closing and never by the vendor when a condo is purchased or rented out. Anyone who buys a new home or condo as an investment property should promptly apply for this rebate because it creates an extra financial burden on anyone purchasing a new rental property because they will be mandated to make complete payments up front including the HST and take the interest up until he/she is granted the rebate.
HIRE GKLAW – HST REBATE LAWYER IN TORONTO
NRRP Rebate and HST Rebate Application Service
Our efficient team of professionals can assist you get a rebate of about $30,000! That is if you purchased a new condo or house recently and the rights to the new home wasn’t transferred to the builder in exchange for a lower purchase price. We offer free comprehensive consultations and we don’t charge you until the Government offers you your non-taxable new home HST rebate cheque. We have processed over $10 million of new housing rebates for people with similar cases and our reliable service ensures you get your due eligible rebate as soon as possible despite the fact that applying for the rebate on your own can be difficult and confusing.
Contact us now to see how much a refund you are entitled to get!
We offer Why Does Ontario Rebate HST on New Homes?
In Ontario, July 1, 2010, harmonized Sales Tax was implemented and this resulted to a rise in tax from 5% (GST) to 13% (HST) on new homes in the province. The Government introduced a rebate program to reimburse buyers for a portion of the additional new home tax in order to assist new homeowners deal with the increased cost of buying a new home.
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HIRE GKLAW – REAL ESTATE LAWYERS IN TORONTO
Ontario HST Rebate New Home Eligibility
If you have done any of the following listed below, you may be qualified for an HST rebate of up to $30,000 in Ontario:
- Purchased a new condo
- Purchased a newly constructed home
- Contracted someone to build a house
- Converted a non-residential property into a home
- Built a house
- Added a major addition to a home
- Got a contractor to renovate the condo or home extensively
- Substantially renovated a house or condominium
- Bought shares in a newly constructed cooperative housing project
- Rebuilt a home that was destroyed by fire
What is the Maximum New Housing HST Rebate Possible?
13% HST consists of a 5% federal tax and 8% provincial tax is charged to new home buyers in Ontario upon their purchase. In summer 2010, 75% of the Ontario portion of the HST, the new house HST rebate in Ontario reduces up to a new home purchase amount of $400,000. This leads in a high rebate at a provincial level of $24,000 ($400,000 x 0.08 x 0.75). Obtaining a federal rebate of up to $6,000 is also possible. Usually, any house purchase over $450,000 in other provinces, the new home rebate is clawed-back, but this is not the case in Ontario. For a million dollar home, $24k provincially and $6k federally for a total of $30k, the rebate is never clawed back, but only applies to the first $400,000 meaning the largest rebate possible.
How Long Does It Take To Receive The HST Rebate?
The Canada Revenue Agency (CRA) issues the NRRP rebates and new housing HST rebates within two months. It sometimes takes about six months to process but rebates can be as fast as four weeks. All the list of information and documents needed from the homeowner in order to prepare the rebate application on their behalf can be provided by us. Even before we submit a claim to the CRA, we review supporting documentation and all expenses to guarantee eligibility.
Deadline for New Home HST Rebate
Within two years of a new home or condo closing, the Ontario new home HST rebate or NRRP Rebate ought to be properly filed. You have up to two years to apply immediately after the completion of construction that is if you are applying for an HST renovation rebate.
Requirements for Primary Residence
A condo unit or new house must be used as the main place of residence by the purchaser or their immediate family, this means that people related by adoption ,marriage, common-law partnership, or blood in order to be eligible for the HST home rebate. The CRA take certain factors into consideration when determining whether or not a house is a person’s primary residence. These factors are, if they have used that address on any personal or public records such as a driver’s license, whether the person considers the house as their main residence and how long the individual has lived in the unit. Typically in southern Ontario, home and condo builders credit the total amount of a buyers’ HST home rebate towards the purchase price of the house. It is extremely rare that the builder pay the rebate directly to the purchaser. This gives the buyer enough money to furnish their new property without requiring a cash back mortgage.
HST Rebates on New Homes with More Than One Buyer
There are many people in Ontario that are receiving demands from the Canada Revenue Agency to repay the HST new-home rebate they received upon closing on their real estate purchase. This claim arises when a third party has been added to a home or condos’ title at the insistence of the mortgage lender. All the buyers are disentitled if even a single registered buyer does not qualify for the new home HST rebate, according to the CRA, the Excise Tax Act.
A real Estate Lawyer from Vaughan was quoted in a new story on thestar.com. The lawyer made us understand that many of his clients did not get their entitled $26,000 each which is the maximum rebate amount plus interest because an aunt was registered as a 1% owner to assist the buyer(s) qualify for a mortgage. According to the CRA, an uncle or aunt is not considered a close relative, meaning that if their primary address is not also the unit in question, this resulted to no one getting the HST rebate.
The primary place of residence must be used as the property for yourself or people closely related to you like a brother, child, sister, grandchild or someone you are related to by common-law partnership or marriage that is if you purchase newly constructed real estate in Ontario and want to qualify for the HST rebate new home program. Business associates, friends, and even aunts, uncles, cousins, nieces, and nephews are excluded from eligibility. You are not eligible for the HST new home rebate, if anyone listed above, owns even a small part of your new home or condo. Either everyone qualifies for the rebate or no one qualifies because it is not possible to receive a certain percentage based on the amount of the real estate owned by you. It is advised that you contact the CRA immediately, if you did receive an Ontario HST new housing rebate even though one or more of the individuals listed on the title will not be living at the residence and are not closely related. It is advisable to resolve the issue immediately rather than get charged thousands of extra dollars worth of interest because when the CRA eventually finds out, you will be charged interest on the total amount of the refund which can add up quickly.
Even if the property is not their primary residence some people are allowed to receive the new home rebate:
People disqualified from receiving the HST rebate if the home or condo is not their primary residence:
- Business Associates
If you made a mistake and requested an HST rebate for a new home and were not actually eligible, you can correct the problem before it becomes a more serious issue, the CRA allows voluntary disclosure so this problem can be rectified. Maybe you purchase a new condo in Toronto with the idea of residing there, but a change occurs in your life changes after taking possession and you end up selling it very soon. you claimed the full HST new condo rebate that you were entitled to when you closed on the unit, since you considered it to be your main residence, but for the fact that it was sold soon after making the purchase; in the eyes of the CRA it looks like a buy and flip.
No rebate will be issued if the person living on the premises and is not closely related. No rebate will be issued if you do not properly apply for the HST rebate on rental property (NRRPR), you could retroactively receive a Notice of Reassessment from the CRA or Notice of Assessment stating your HST rebate claim has been denied and that you owe money for not qualifying for the rebate. If the applicant does not follow all the rules, the C.R.A will disallow the rebate. A tenant must sign a lease for the investment property before the owner can qualify. The new residential rental property rebate requirements state that the CRA also charges interest on all outstanding amounts, and has been very successful when challenged in tax court, so before applying for a new property rebate, make sure you understand all the rules and regulations.
How do I know if I am being charged for HST by the Condo eveloper or Home builder
The developer or builder will often incorporate the rebate into the listed price of a property in order to lower the “sticker price” of a newly constructed condo or house. Upon signing the purchase agreement, the rights to the proceeds of the new housing rebate are transferred to the developer or builder in exchange; they deduct the HST rebate amount from the purchase price. When the buyers’ HST new housing refund is issued the vendor knows they will be paid back. This reduces the purchase price for the buyer and relieves them from the headache of having to file for the refund themselves, this scenario is quite common.
In most provinces, there are two components to the new housing HST rebate and they are the federal portion, and the provincial portion. But in Ontario, the rebate only applies to the provincial portion of the HST, which is 8%. However, having a condo developer apply the maximum HST rebate for new property to your purchase enables you to borrow the least amount of money possible to afford the property. It prevents you from taking a larger mortgage to cover the town home, condo, house or co-op, full cost including HST, your mortgage only has to cover this amount minus the amount of your H.S.T. rebate. You will not be eligible to apply for the rebate on your own If the price of the new house or condo includes a deduction of the HST rebate amount, since the rights to it belong to the vendor.
HST Rebate for New Condo Flippers
According to the recent court case, the intention of a buyer affects their eligibility for a rebate. A property must have been purchased with the intention of using it as their primary residence or of a close relative. The buyer’s intent matters at the time of the initial purchase and not later. Meaning that a buyer who purchases a new property to flip it for profit is not eligible for a rebate since the condominium was never intended to be their primary residence. The main determining factor is how legitimate is the claimant’s usage of the property as his or her primary residence and the exact amount of time that a purchaser must reside in a home in order to be granted the rebate is handled on a case-by-case basis.
A reasonable amount of the condo flippers that were claiming HST new condo rebates wrongly were those buying first phase pre-construction condos and then selling them almost immediately after the construction was concluded soon as they were built. While this strategy has paid off handsomely in the Toronto area, the Canada Revenue Agency is now coming after these individuals for the HST rebates they erroneously received as well as interest and penalties. There have been many stories in the news lately about purchasers of new condos in Toronto pretending the units are going to be their primary residence in order collects the HST rebate on new homes. Although it was the condo developer who pocketed the HST rebate from the Government after the rights to it were transferred, the CRA comes after the condo buyer since they were the ones offside on their taxes
Owner-Built Home Rebates
In the case of the owner-built homes, the highest Ontario HST new home rebate amount depends on if the person paid the provincial part of the HST when he/she bought the land upon which they extensively renovated or constructed. If the person did not pay the provincial portion of the H.S.T. when they bought the land, the rebate is equal to 75% of the provincial part of the HST paid on eligible construction costs only, up to a maximum amount of $16,080. If the person paid the provincial portion of the HST when they bought the land, the rebate will be equal to 75% of the provincial portion of the HST paid on the land as well as eligible construction costs, up to a maximum 24 thousand dollars. It is also possible to obtain a tax rebate for new housing from the Federal Government of up to $6 thousand.
A taxable self-supply is a person is considered to have sold and then repurchased a property either on condo is given to a person under a lease or on the date possession of the home on the date or the substantial renovation is complete. The HST applies on the date that the self-supply occurs the person will be considered to have paid and then collected the HST on the fair market value of the home. Within two years, you must file HST rental rebate application the new home of the self-supply date to be eligible for a refund.
Does The HST Housing Rebate Apply to Cottages?
Recreational properties like a cottage do not qualify for a tax refund or the HST rebate as it only applies to principal residences and rental properties.
HST Rebate for New Homes on Leased Land
Also, people who purchase a brand new mobile home located on land that they rent can still be granted a new housing HST refund. Eligibility for the provincial new home HST rebate in Ontario does not require you to own the land underneath your new property.
When Can I Apply For the HST Rebate on New Homes?
As soon as construction is more or less complete and you or a tenant or a close relative occupying the property can apply for the NRRPR or HST rebate. Immediately you close on the brand new home or condominium property you can apply for the HST or NRRP Rebate. Even when renovating a property, you can apply for an HST Ontario rebate or NRRPR once you are almost done with the work, provided you, a close relative, or a tenant is living in the property. Maximize the value of the rebate by include all renovation , it advisable to wait until all of the work has been completed, however, since you can only apply once, so it is important that you do. People who buy a new co-op apartment, condo, house, townhome, duplex, fourplex, triplex and so on, to rent out can only apply for the HST new residential rental property rebate if they have a tenant sign a lease for an apartment.
2018 New Housing HST Rebates in Ontario
According to a national household survey, 70% of Canadians owned their home as of 2013. Many people are encouraged by the Canadian Government to own a house and many people buying or looking to buy are unaware of the new condo HST rebate. Those acquiring new property in the GTA for investment reasons pay huge amount of dollars in HST, this is why it is very vital that they apply for a new house rebate otherwise they will not get anything back especially in Toronto and Ottawa that have a large quantity of immigrant home buyers. Since many new Canadians are not familiar with the Canadian tax code and property market , they are unaware of the rebate but in most cases their real estate law agent will advise them of the rebate during the purchase process.
All residents in Ontario can receive our HST new home rebate service provided they did not assign their new housing rebate (NHR) to the home builder. If you live in Ontario, Ottawa, Thunder Bay, Cornwall, , Mississauga, Belleville, Brampton, Niagara Falls, Toronto, Peterborough, Hamilton, Sarnia, Vaughan, St. Catharines, Markham, Kitchener, London, Guelph, Burlington, Pickering, Sudbury, North Bay, Oshawa, Sault Ste Marie, Barrie, Brantford, Cambridge, Waterloo, Kingston, Windsor and so on. Our HST rebate service is available to you!
Contact our team of professionals immediately for a free consultation, if you bought a new home or condo recently and you were not given your HST rebate?
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