GST/HST New Housing Rebate
If you’re buying a newly built home from a builder, self-building or buying a substantially renovated home, you might be eligible for this rebate. With the purchase price, land transfer taxes and other closing expenses, it might be hard to pay 13% HST. This rebate is available to everyone buying a new home as their principal residence. And for first-time home buyers, their incentives can be coupled with this rebate. However, you’re ineligible for this rebate if you’re buying under a corporation or business partnership.
Surprisingly, now there’s a relief! Just fill out Houses Purchased from a Builder Form 190 or Owner-Built Houses Form 191 and save yourself thousands of dollars in taxes if you’re buying a newly constructed home.
Here’s how the rebate is calculated.
Firstly you get 36% of the GST (5%) portion you paid for your new home. But the maximum rebate is$6,300 and the maximum fair value can be $350,000. If the purchase price is between $350,001 and $449,999, you’ll still get a partial rebate. Unfortunately, if home’s value is $450,000 or more, there is no GST portion rebate. But you still may claim for rebates on provincial portion of HST up to $24,000.
Here’s a few additional situations you may qualify:
- If you own the land and are building home.
- Over 90% of the interior from the previously existed house is removed or replaced
- If you owned a non-residential property and later rebuilt it into your home.
- When you make any major additions to the house doubling the living space.
Calculate your GST/HST New Housing Rebate:
Let’s assume your home is valued at $340,000. The HST you need to pay on top of $340,000 is $44,200. This includes 17,000 GST and $27,200 provincial HST.
Next, let’s calculate the claimable rebate. Firstly, 36% of the GST portion (36% 0f $17,000) $6,120 plus 75% of the provincial HST portion (75% 0f $27,200) $20,400. Adding up to 26,520.
Note: For new homes in Ontario, the maximum rebate amount for the provincial portion of the HST is capped at $24,000 if you paid HST on the land. And if you did not pay HST on the land, the maximum provincial portion of the HST claimable is $16,080.
So finally, the rebate in this case would be $6.120+24,000 = $30,120.
Where to send the rebate form?
Form GST190 needs to be mailed with your direct deposit info to:
Sudbury Tax Centre
1050 Notre Dame Avenue
Sudbury ON P3A 5C1
The GST/HST new housing rebate is an not automatic rebate. You need to apply manually and make sure you don’t forget to do this when you file taxes.
In case, the builder of your home has already included the HST in the purchase price, you’ll be able to include the purchase price plus HST amount in your mortgage.
To get a professional advice and approval, contact me(647) 568-5120.
Sourced from Canada.ca.