This means that if not handled properly, the loss of your money and time can be huge.

To make it easier for everyone to understand the cost of buying a new condo or house in Ontario, HST Rebate The Golden Key Business Development Center has analyzed the various situations related to the tax refund plan in detail to remind new home buyers of the issues they need to pay attention to in this regard. If your situation is different from ours, we recommend that you consult your lawyer and accountant for relevant HST Rebate for more information.

1.  Who will be the beneficiary of the HST rebate for new homes? 

Everyone may be aware that buyers of pre-construction condos can qualify for the HST rebate, but they are not the only group of buyers entitled to the HST rebate. In some cases, even homeowners who are completely renovating their homes can qualify for the HST rebate.

Here is a breakdown of who can get an HST rebate in Ontario:

• End users and investors who purchase pre-sale apartments or houses
• Homebuyers buy newly constructed homes that have never been lived in
• Homeowners who are completely renovating their homes (no kitchen or basement renovations here. Instead, only head-to-toe transformations that affect every room in the house qualify)
• Build your own new house

2. HST Rebate: New Home Owner-Occupants and Rental Investors

First, the two methods of claiming the HST rebate differ depending on whether you plan to live in the home yourself or are an investor who wants to rent out the home immediately after closing as a rental property.

New home owner-occupiers

If you plan to move and live in the new property, you must apply for New Home Rebate (NHR) Under the NHR, you will receive a rebate of HST because you (or an immediate family member) will occupy the new property as a new resident for at least the first year.

In most cases, especially when buying a pre-sale condo in the Greater Toronto Area (GTA), you will receive the HST rebate immediately in the form of a discount on the contract price (the contract price is equal to the price of the new home plus the HST/GST minus any rebates you may receive from the CRA). Most condo and house developers will already factor the HST rebate into the contract price. If the new property is sold before the initial one-year window, the Canada Revenue Agency (CRA) will require you to return the full amount of the HST rebate, which could total up to $30,000.

So buyers who buy new apartments for their own use must remember the following key points:

• The new homebuyer (or an immediate family member) must occupy the new home as their primary residence for at least the first 12 months after closing
• If the property is sold within the first year, the buyer will be required to return the HST rebate in full.
• Notice If your new home is rented in the first year, you may be required to pay the full HST, otherwise you may still be able to get a rebate by applying for the New Residential Rental Property Rebate.
• In order for the HST rebate to be available, all co-signers must live in the new home as new residents.
• It is important to take all steps to make your new home your primary residence, including changing your driver’s license address.
• You can apply for the HST rebate up to two years after you acquire ownership. After two years have passed, you will no longer be eligible for the rebate
• Typically, the HST rebate is included in the pre-construction condo price list.

New Home Rental Investors

Whether you are a Canadian or foreign investor, you are eligible for the HST rebate on your new home. However, you must submit  New Residential Rental Property Rebate (NRRPR) form , instead of applying for NHR.

To receive an HST rebate through the NRRPR, you must provide a one-year lease agreement to prove that the new home was rented to a tenant for at least the first 12 months after the handover. The new home must be rented out for at least the first year before it is sold. If the investor sells the property before the one-year deadline, the HST rebate will not be eligible and the rebate amount must be repaid in full.

Unlike NHR, investors applying for the new residential rental property rebate must pay the full HST upfront and receive the rebate about two or three months after submitting proof of the rental agreement.

Please note:

• The investor must provide a one-year rental contract and rent out the new property for at least the first 12 months.
• If the new home is sold or changed in use within the first 12 months, the HST rebate must be fully refunded
• Under the NRRPR, investors must pay the HST in full upon purchase and will only receive a refund two or three months after submitting the lease agreement. Therefore, investors should be well prepared in the early stages of purchasing.
• Investors planning to apply for a new home rental cannot apply for an HST rebate through the NHR, but must apply for the NRRPR
• You can apply for the HST rebate up to two years after you take possession of your new home. After two years have passed, you will no longer be eligible for the rebate.
• Typically, the HST rebate is included in the pre-construction condo price list.

3.  How much is the HST refund?

Ontario's Harmonized Sales Tax totals 13% of the purchase price of a new home, a combination of 5% GST and 8% PST.

The amount of the HST rebate depends on the price of the new home. If the price of the new house or condo is less than $350,000, you are eligible for a rebate of up to $30,000 (36% for the GST portion and 75% for the PST portion). Between $350,000 and $450,000, there is an adjustable rate. For properties priced over $450,000, the rebate is up to $24,000.