What is the GST/HST New Housing Rebate/Rental Rebate and How to Receive It.
There are multiple forms and documents that you will need to read and sign during the process of buying any residential property. If you’re planning on purchasing or renting a newly built property after conveyance, then you will come across the GST/HST New Housing Rebate/Rental Rebate form. Trust us, this rebate will become your new best friend, and if filled out correctly, it will save you money.
What is the GST/HST New Housing Rebate/Rental Rebate and who is eligible?
It is assumed that when a home is built, the builder or person responsible for costs involved will have paid all the GST/HST involved that brought the home up to its fair market value at the time of conveyance. As the purchaser of this conveyed land, you will be required to return the builder the GST/HST paid on the property up until the date of purchase. It will be added to the amount due to close. Often, large building corporations offer to accept the closing funds with the GST/HST rebate already deducted and file the signed rebate forms on your behalf. Many cases, however, require you as transferee to pay the GST/HST and then file the application for rebate separately. The rebate forms and all accompanying required documents MUST be received by the Government of Canada within 2 years of the date of conveyance.
According to the Government of Canada, you are eligible for the rebate if you meet one of the following criteria:
- A landlord who purchased a newly constructed or substantially renovated residential rental property;
- A landlord who built your own residential rental property;
- A landlord who made an addition to a multiple-unit residential rental complex;
- A builder who had to account for the GST/HST under the self-supply rules because you sold a residential unit to an individual and leased the related land to that individual under a single written agreement (only available where the individual is entitled to claim the new housing rebate); or
- A person who had to account for the GST/HST under the self-supply or change-in-use rules because you made an exempt lease of land used for residential purposes (such as the rental of a residential lot or a site in a residential trailer park)
You will also need to prove that the intention of the property is to be rented out for residential use with no commercial use. You may need to repay a rebate in the future if you sell the residence within one year of conveyance and the property is not being occupied by the transferee or a relative of the transferee, or if you become no longer eligible for other reasons set out by the government.
Please note: in order to be eligible for the full rebate, the fair market value of the home must be below $450,000 ($112,500 if the home is a trailer). Any tax paid over this amount is not eligible for the rebate and will be adjusted accordingly. Or, if you are a resident in Ontario and the FMV of the property is over the allowed price, you may be eligible for the provincial portion of the rebate. Having an experienced accountant who understands the math behind these calculations is useful to find out how much of a rebate for which you are eligible.
What is the Processing Time?
The builder of a new home will have the transferees (purchasers) sign the HST/GST rebate form as part of their closing package. This allows the final closing amount to reflect the HST/GST as part of their amount due and will be transferred immediately upon closing. These forms are then sent to the Government of Canada for processing. If you are already registered for direct deposit with the Government of Canada, it is possible that this will speed up the time of refund, but you should ensure that this information is accurate and that whoever is filing the rebate forms on your behalf also has this information included.
Depending on whether the property is a single or multi-residential unit, there are separate forms that you will need to apply for the rebate. These can be found on the Government of Canada website. If the wrong form is filled out or there are improper or incomplete accompanying documents or calculations, it could affect the processing time.
Why Choose Us?
When it comes to the GST/HST or Rental Rebate, there are many factors that come into consideration, so you need to have an experienced agent on your side. KeWang Professional Corporation is one of Toronto’s most esteemed General Accountant Professional Services serving clients throughout the GTA from various personal and professional backgrounds. With over ten years in business, we encourage you to see the difference our agents can make for you and why our clients are the most satisfied in the industry.
We offer affordable prices in comparison to legal firms and have experience and knowledge when it comes to taxes and the Ministry of Finance. When it comes to one of the most important purchases of your life, don’t leave anything to chance. With KeWang Professional Corporation in your corner, you’ll have peace of mind and the benefit of our team’s considerable talents. Our agents will be happy to assist you by phone, over email or in person at our headquarters in North York. Reach out for a consultation today.