The Ontario government has set up an HST rebate on new homes as a means of helping new homeowners with the ever-increasing cost of buying a home. By offering homebuyers an HST rebate on new homes, the aim is to lessen the financial burden for the many first time buyers.
The HST rebate on new homes takes between 2 and 6 months to be processed (from submission date). Like other government rebates and incentives, claimants must submit a proper application, with supporting documentation, and all relevant invoices. It all goes to Canada Revenue Agency.
As a rule, the HST rebate on new homes must be filed no later than 2 years from the purchase closing date (this is for a home or condominium). In order to be eligible for the HST rebate on new homes, the purchased premises must be shown as being used as the “primary residence”.
Canada Revenue Agency has a specific definition for a primary residence. In short, the premises must be used as the main living residence, and the property address must appear officially on personal or public records. Failure to comply could result in rebate denial and even penalties.
In general, there are a few categories when applying for an HST rebate on new homes. Depending on the situation, the paperwork can get complex, so working with a rebate specialist might be a worthwhile option. Everything is done under one roof, by experts, and with much less stress.
- Rebates are available to those who purchased a new home, constructed a new home, or substantially renovated an existing home. The premises must be the primary residence.
- Rebates are available to those who purchased shares in CO-OP housing. Once again, the CO-OP unit must be the primary residence. In some cases, a very close family member may qualify.
- Rebates are available to those who either constructed a home, or “substantially” renovated a home. An outside contractor can be hired to do the construction or renovation of the home.
Submitting an application for the HST rebate on new homes
With government rebate programs, paperwork and documents must accompany an application. Applicants must include original invoice copies with an application, and the invoices must show that the vendor didn’t charge HST. In some case, applicants are asked for proof of occupancy.
Once an application has been submitted, applicants must keep paperwork, invoices, and related documents for at least six years. Only original invoices with the name of the applicant will be accepted. CRA will not accept statements, estimates, or quotes as components of the application.
In situations where a “third party” is an integral part of the property ownership, CRA defines that “third party” as a “very close family relative”. Anything short, and the rebate will be disqualified. With CRA, failure to comply with any rules could result with a return of the rebate and interest.