Understand the HST Rebate in Ontario
The HST Rebate in Ontario was introduced to repay a portion of the Harmonized Sales Tax already paid on new or heavily renovated homes. The two most common categories:
- New Housing Rebate: for buyers who will be making the house their residence.
- New Residential Rental Property Rebate (NRRPR): for owners or investors who rent the house out.
They both have their requirements, and taking the wrong one can lead to delay or even a request for repayment by the CRA.
Renting Out and Its Impact on Eligibility
If you purchase a home to live in, the New Housing Rebate might be for you. However, if you plan to rent it out immediately or shortly after closing, you won't qualify for that rebate. Instead, the policies of HST rebates in Ontario direct you to the NRRPR, which is specifically for rental housing.
The surprise? The NRRPR requires a signed lease and proof that the unit is to be occupied for long-term rental, not short-term rental or residential purposes.
Common Mistakes That Will Cost You
First-time homebuyers and investors alike often lose their rebates because they:
- Ask for the wrong rebate type.
- Rent the property too soon after closing without notifying the CRA.
- Fail to meet the primary residence requirement for the New Housing Rebate.
These mistakes can be prevented as easily as talking to a rebate specialist like Rebate4U before filing your application.
How to Qualify for the Rental Property Rebate
To be eligible for the NRRPR, you need:
- A long-term lease agreement.
- Proof of closing documents.
- Filing of the application within two years of the date of the final closing.
This version of the HST rebate on buying new condos can still save you thousands, making it worthwhile to pursue.
Financial and Tax Considerations
Though the rebate could be significant, sometimes over $20,000, it's wise to watch for tax implications. Converting from personal use to rent or vice versa could result in paying back some of the rebate or applying anew under a different program.
Keeping Your Rebate Safe
If you've already rented your property out and taken the wrong rebate, you can typically correct the issue with the CRA. You'll have penalties and interest applied, though, if it's not corrected. That's why professional advice is worth it.
Maximize Your Rebate and Avoid CRA Issues
The idea is that leasing out your home isn't an instant disqualifier on your end, it just changes what rebate applies. Whether you're working with the HST rebate Ontario for private homes or the rental property version, getting Rebate4U as your experts assures you claim the right one, avoid costly mistakes, and receive your maximum refund quickly.
