menu

Do I Have to Pay HST Upfront on a Rental Income Property in Canada?

Date Posted
21 September 2018

When you are buying your first rental property, you may be faced with a question whether you have to pay HST upfront on a rental income property in Canada. For instance, in a situation where you are buying a house or a condo as a primary residence to live in for yourself or a close relative, the seller will typically reduce the final purchase price with HST included by the same amount as the new housing rebate. In exchange, the seller will receive the full rights to your rebate after it has been issued by the CRA. This helps the buyer to afford the property more easily, as the upfront purchase price is significantly lower, and also saves him or her from the complicated application process for the new housing rebate -  the seller takes care of this him- or herself. In addition, this allows condo developers or builders to advertise their housing with a lower “sticker price”. When you are shopping for a new house or condo, many of the advertised prices are actually already reduced by the new housing HST rebate.

Do I Have to Pay HST Upfront on a Rental Income Property in Canada?

Buyers have to pay HST upfront on a rental income property in Canada

However, it is important to understand that vendors are allowed to lower the selling price of the house by HST amount for PRIMARY RESIDENCE buyers only. As such, all other buyers, such as buyers of rental property, must pay HST upfront, making the purchase price higher than it is usually advertised. The good news is that in Ontario, there exists a special HST rebate, which is created to ensure that property-buyers who purchase rental property do not pay for the house more than they would if they were buying a primary residence.

What is the NRRP Rebate (New Residential Rental Property Rebate)?

When you have to pay HST upfront on a rental income property in Canada, the home purchase price could be significantly increased. Luckily, the Canada Revenue Agency offers the GST/HST New Residential Rental Property Rebate to any landlord who purchases a new house or a condo for rental purposes. The major difference between the regular GST/HST New House Rebate and the NRRP Rebate is that with NRRP Rebate, the buyer must pay HST upfront on a rental income property in Canada, and only then apply for the rebate on their own, instead of the vendor handling the application for the buyer.

What does this mean for you and your property?

With a standard HST rebate, saving money is simple: the property vendor takes care of all the documents and rebate application process for you. However, with New Residential Rental Property Rebate, you are left on your own to handle the application. Similarly, to other rebate programs, specific rules, regulations, and deadlines must be followed. Landlords must also understand that “renting out” would require a full one-year occupancy in order to be eligible for the rebate. Since most property buyers interested in applying and receiving the NRRP Rebate are not accountants or tax lawyers, they often use the services of tax rebate professionals, such as Rebate4U. Attempting such a complex process on your own can negatively affect the accuracy and timeliness of the HST rental rebate application, and therefore put your refund cheque at risk! In summary, when you purchase a new rental property, you should:
  1. Pay HST upfront on a rental income property in Canada.
  2. Contact rebate specialist, such as Rebate4U, to file your rebate application.
  3. Receive your New Residential Rental Property Rebate cheque.
In addition, you can use the HST rebate for your rental property to reduce the principal amount of the mortgage. You could commonly take out a mortgage with a “prepayment” option, meaning you could prepay up to 20% of the original principal amount at the end of the year, without paying any additional penalties or charges. Buyers that contact Rebate4U for help with NRRP Rebate typically receive their rebate money after 2 months, which means that they will not pay additional interest before they can use the full rebate directly towards the mortgage principal.

Do you qualify for the NRRP Rebate?

When you purchase new rental property, you must pay HST upfront on a rental income property in Canada, and then apply for the rebate from the Canada Revenue Agency yourself – not through the builder. Furthermore, in order for you to be eligible for the rebate, the first people to live in the new property must be tenants, not yourself. To claim the rebate, you must make an application within 2 years of the property closing date by completing Form GST524. Depending on your specific situation, you might need to fill out additional applications or forms. Then, send all the forms to the CRA, including any supporting documentation required. If you decide to sell the property within one year after receiving the rebate, you may be required to repay the rebate back. The only exception is that if you sell the property to a person who occupies it as his or her principal residence.

Applying for the NRRP Rebate is Easy with Rebate4U

When you buy a new rental property, you do have to pay HST upfront on a rental income property in Canada. However, as complicated as the rebate process appears to be, the professional team at Rebate4U will take all the pressure and stress away from any rebate application (especially if you are a first time landlord). We will guide you through every step of the process – from initial application to the refund cheque. Rebate4U specialists have years of experience dealing with government programs and maintain regular contact with government departments. In rebate application process, any mistake can cost you thousands of dollars. Luckily, with Rebate4U, you can rest assured that all the paperwork is submitted correctly and timely. To learn more about qualifying for the New Residential Rental Property Rebate, contact the rebate specialists at Rebate4U by visiting www.rebate4u.ca or calling 1-800-610-4510.

Contact Us

Please Answer 6+8=

Rebate Calculator

Please enter the total value of your renovation including tax.

Total construction cost
(including taxes)
$
Search Our Blogs

More of our Blogs

29 September 2023

Benefits of Renting Your Newly Purchased Home

Get Money Back with the HST Rental Rebate   The leading opportunity of buying or building a new residential property in Ontario is the HST Rebate. With any purchase you make on goods and services in Ontario, you’re charged Harmonized Sales Tax or HST, which is a 13% tax. With large purchases like a home or condo, the 13% harmonized sales tax can add up to a significant...

View Full Post
20 September 2023

Experts Tips for Navigating the HST Rebate on Newly Built Homes

Here are expert tips on navigating the HST Rebate for new homes.   Retain All Your Records When you’re building a home from the ground up or renovating your existing property, it’s imperative that you keep a copy of all your records. The rebate is designed to give homeowners back a portion of the amount they spent on HST (Harmonized Sales Tax) during construction....

View Full Post
21 August 2023

Tips for Planning Your New Home Rebuild HST Rebate

Learn About the HST Rebate & Eligibility The New Home HST Rebate is a rewarding program for residential property owners throughout Ontario looking to recover some of the costs they invest in building their perfect home. Designed to put money back into your pocket, there are strict requirements that applicants must meet. Before you begin accounting for the HST Rebate in Ontario while...

View Full Post
31 July 2023

Identifying HST Rebate Eligible Elements in Your Construction Journey

Plans & Design Because a renovation must be substantial, accounting for approximately 90% of the property to qualify for the HST Rebate on home renovation, you'll need a plan before you start working on your renovation, demolishing walls and removing flooring. You'll most likely need to source architects and renovation contractors to visualize your rebuild and ensure that all aspects are in...

View Full Post
24 July 2023

Why Rebuild Damaged Homes with HST Rebate in Ontario

What is the HST Rebate on Newly Built Homes? In Ontario, a 13% harmonized sales tax, a combination of GST and PST, is applied to all purchases, including purchasing property or building materials and renovation services. In an effort to enable affordability, the government offers an HST Rebate program which gives qualifying property owners buying a brand new property or building a new home from...

View Full Post
25 May 2023

Guide to HST Rebates & Renovations this Summer

Understanding HST Rebate Programs in Ontario Harmonized Sales Tax or HST is a combination of the Goods and Services Tax (GST) and Provincial Sales Tax (PST) that is applied to all purchases, amounting to 13% throughout Ontario, including homes, building materials, and renovation services. To increase affordability, the new home HST Rebate in Ontario gives residential property owners a portion of...

View Full Post
01 May 2023

How to Cash in on Your Major Home Addition

What is the HST Rebate on New Homes? The New Home HST Rebate is a program offered by the government that provides those purchasing, building, or significantly renovating a new residential property a refund on a portion of their HST spend. HST, or Harmonized Sales Tax, is charged on every purchase of sales and goods in Ontario, amounting to 13%. On a large project like a major home addition, HST...

View Full Post
31 March 2023

Benefits of Renting Your New Home

What is the New Residential Rental Rebate Program? Offered through Canada Revenue Agency, the New Residential Rental Property Rebate is an HST rebate that gives residential property owners a portion of their HST spend back on a newly built condo or rental property. Depending on the property, your eligibility, and the amount spent on HST, this rebate can add up to tens of thousands of dollars back...

View Full Post
20 March 2023

Guide to Applying for the HST Rebate in Ontario for Newly Renovated Homes

Determine Eligibility First, you need to determine if you are eligible for the HST rebate. The rebate is available to those who have completed a substantial renovation or constructed a new home. A substantial renovation is defined as a renovation that involves removing or replacing most of the interior of a home or at least 90% of the home's interior. If you've bought a new home directly from the...

View Full Post
01 March 2023

How to Save Money When You Build Your Own Home

What is the Ontario HST Rebate? The Ontario HST Rebate on New Homes is offered by the Canada Revenue Agency. The program enables individuals constructing a new home from scratch or undertaking a significant renovation of an existing residential property in Ontario to qualify for a rebate on a portion of the 13% Harmonized Sales Tax (HST), which is charged on all goods and services throughout the...

View Full Post
Homeowners, obtain an HST rebate of up to $30,000 today!
get started

Why Choose Rebate4U?

Experienced Specialists

For over 10 years, the Rebate4U team has the knowledge and expertise to help residential property owners throughout Ontario successfully apply for regional HST Rebate programs.

Millions Awarded

We are able to expertly navigate rebate opportunities, staying up-to-date on the most recent rebate developments and changes in the HST Rebate program to maximize returns. To date, we’ve successfully acquired millions of dollars for clients in total.

Free Consultations

Our specialists offer complimentary consultations where we review your eligibility to determine whether you qualify for an Ontario HST Rebate so you can proceed with your application confidently.

Customer Commitment

The Rebate4U team is dedicated to delivering the highest level of customer service, we are here to answer your questions and help you navigate the intracises of your application easily and efficiently.

Cashing-In on the HST Rebate is as Easy as 1-2-3
Contact REBATE4U

Set up a quick, free consultation with the Rebate4U team to explore your HST Rebate options.

COLLECT DOCUMENTS

Submit your required documents to Rebate4U, and we'll handle your application.

GET YOUR Money BACK

Apply for the rebate and receive thousands in rebates in just weeks with Rebate4U.

FIND OUT IF YOU QUALIFY

We are proud to be working with top Canadian companies

Recent Posts view all posts

Tips for Planning Your New Home Rebuild HST Rebate

Rebuilding your home from the ground up can be a daunting undertaking but incredibly rewarding with the right approach and programs like the HST Rebate in Ontario. The New Home HST Rebate allows qualifying residential property owners to recover a portion of their rebuilding co...

Read More

Identifying HST Rebate Eligible Elements in Your Construction Journey

The HST Rebate in Ontario is an excellent opportunity for property owners looking to undergo major construction. Whether you've recently purchased a plot of land to build a brand new property or are planning to tear down an existing home to its studs and renovate it, the HST R...

Read More
We Are Based

Rebate4U
101-3185 Bathurst St
Toronto ON
M6A 2B2

1-800-610-4510
info@rebate4u.ca

Connect With Us
Error...

Please, enter a valid value

We are sorry...

But the values you entered are invalid

Rebate

In celebration of our 3 year anniversary at Rebate4u Inc, we have decided to reduce our fee structure for all new home and renovation rebates including the New housing rental rebate.  

Don't waste your time looking for anyone else to take care of this because we will not be under sold.
Please fill out the form below or call us at 1-800-610-4510

Please, enter a valid value