If you recently purchased a newly built home, condo, or assignment in Ontario, you may be entitled to a significant GST/HST rebate. But the rules are specific, the paperwork is detailed, and mistakes can result in a denied application or money owed back to the CRA.
What is the HST New Housing Rebate?
When you buy a new build, HST is included in the purchase price. The federal and provincial governments each offer a rebate on a portion of that HST, but only if you meet certain conditions. The rebate amount depends on the purchase price and how the property will be used.
Two types of rebates
Owner-occupied rebate: If you purchased the property as your primary residence (or for an immediate family member), you may qualify for the GST/HST new housing rebate. The federal portion phases out as the purchase price increases above $350,000 and is fully eliminated at $450,000. The Ontario portion has its own thresholds.
New residential rental property rebate (NRRP): If you purchased the property as a rental investment, a different rebate applies. You must demonstrate that the property is being rented to a tenant as their primary residence. The application process is different from the owner-occupied rebate.
Assignment purchases
If you purchased through an assignment agreement, the rebate rules are more complex and depend on the specific details of the transaction.
This is an area where professional guidance is especially important.
Common mistakes
Applying under the wrong rebate type. Owner-occupied and rental rebates have different application processes and requirements. Applying under the wrong one can delay the process or result in a denial.
Missing the deadline. You generally have two years from the date of closing to file. Miss it and you lose the rebate entirely.
Insufficient documentation. The CRA may request proof of how the property is being used. If you can't demonstrate the property's use, it can affect your application.
What to do
If you've purchased a new build or assignment and haven't applied yet, or if you're not sure whether you qualify, it's worth having a CPA review your situation. Having a CPA handle the application ensures everything is submitted properly the first time.
