GST/HST New Housing Rebate: Eligibility, Amount, and Calculation Method!

A rebate known as the New Housing Rebate enables homeowners to recoup a portion of the money they paid for their houses. In Ontario, anyone who has bought a new home from the builder in the last two years is eligible for the HST New Housing Rebate.

GST/HST New Housing Rebate

Though many home purchasers are uninformed of the HST and GST housing refunds in Ontario, which allow them to return GST/HST spent on their residences, whether bought from a home builder or custom-built, the housing boom in the Greater Toronto Area has helped the local economy.

When a new or substantially refurbished home is used as the main place of living of a person or partner and all other requirements are met, the GST/HST new housing rebate allows the human being to recover a portion of the federal portion of the harmonized sales tax (HST) or the goods and services tax (GST). 

The entire cost of the house must be purchased for less than $450,000 in order to be eligible for the federal rebate; otherwise, the federal share of the HST paid will not be refunded.

Who is eligible for the New Housing Rebate? 

You may be eligible for the GST/new HST New Housing Rebate if you meet certain criteria. Here are the eligibility conditions:

Acquired New or Significantly Remodeled Residential Property from a Developer:

  • You might be eligible for the rebate if you purchased brand-new or significantly repaired housing from a builder, such as housing on leased land (if the agreement to lease is for at least 20 years or provides you a chance to buy the property), and you plan to use it as your main place of residence or the primary residence of a related person.

Cooperative Housing Corporation (Co-op) Shares:

  • You may be eligible for the refund if you bought shares in a co-operative housing corporation (co-op) with the intention of utilizing a unit in a recently built or extensively remodeled cooperative housing complex as your primary residence or the principal residence of a relative.

Built or Significantly Remodeled Your Own House:

  • You might be eligible for the rebate if you built or significantly updated your own home (or hired another individual to do so) and used it as your primary residence or the primary residence of a relative, and the actual market value of the residence when the building process is substantially finished is less than $450,000.

Floating residences and mobile houses:

  • You might also be qualified for the rebate if you bought a new or significantly renovated mobile home (including a modular house) or a new or significantly renovated floating home to use as your primary residence or the principal residence of a relative.

How much do you get from the rebate? 

A $24,000 highest Ontario new housing rebate is offered, which is equivalent to 6% of $400,000. In Ontario, homebuyers are essentially required to pay 2% of the province tax on the first $400,000 of the cost of buying and 8% on any further funds. 

Only the first $400,000 of the refund amount is eligible for reimbursement. On the other hand, residences worth more than $450,000 are still eligible to qualify for the provincial rebate, unlike the federal one.  

How is the GST/HST New Housing Rebate calculated? 

The GST/HST New Housing Rebate amount varies based on several factors. Here’s a breakdown:

Purchase Price or Cost of Construction:

  • If the purchase price or cost of construction of the new or substantially renovated home is $350,000 or less, the maximum rebate amount is 36% of the GST or 75% of the federal part of the HST.
  • If the purchase price or cost of construction is between $350,000 and $450,000, the rebate amount gradually decreases as the price increases.

Fair Market Value (FMV) of the Home:

  • If you constructed or substantially renovated your own home, the FMV when construction is substantially completed must be less than $450,000 to qualify for the rebate.

Primary Place of Residence:

  • The home must be intended for use as your primary place of residence or your relation’s primary place of residence.

Other Factors:

  • The rebate may also depend on whether you purchased from a builder, acquired shares in a co-operative housing corporation, or bought a mobile home or floating home. 

When can you expect to be paid?

The Canada Revenue Agency (CRA) usually sends out new housing HST rebates approximately two months. Rebates can be processed in as little as 4 weeks, but they sometimes take a maximum of six months.

You could have to wait up to six months to get your money because every claim is auditable. If the necessary documents are not included with the form submission, the forms aren’t finished completely, or the rebate computation is inaccurate, the review of the reimbursement may be postponed or your rebate may be refused.

Go to NCBLPC Homepage.

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