Eight questions and answers about new home tax refunds: Living or investing in Canada is impossible without understanding policies and taxes. The more you understand, the less risk you will have in your investment direction and the problems you deal with.
Recently, due to the epidemic, many international students have returned to their home countries. However, considering the cost of leaving the house empty, many people will consider renting out the house. But please note that if you have problems with new house tax refunds or overseas buyers' tax refunds, renting out the property may cause many tax problems. So please think twice before you act.
HST Rebate FAQs
Case 1: My husband and I bought a condo in the city for our own use, but the house is for our children who are in college, and we don’t live there. Can we still get the HST back?
Case 2: When signing the house purchase contract, my husband went alone, so only his name was on it. However, when the house was delivered, only my name was on the property certificate. Can the HST sales tax be refunded in this case?
Unfortunately, there is no way to refund the tax in this case. It is only possible if the names on the purchase contract and the property certificate are the same. So here I want to remind everyone that signatures should not be taken lightly, otherwise you will suffer the consequences.
Case 3: My friend and I bought a property for our own use. After the property was delivered, only my friend moved in. I did not move in. Will the tax bureau require me to return the HST refund?
This is the case. So according to the requirements of the Canada Revenue Agency, only when you both move in and live in the house will you be eligible for the HST refund, otherwise you will have to return the refund money to the tax agency.
Case 4: I bought two pre-sale properties within one year, both for my own use. When I bought both properties, I deducted the HST refund. However, after the second property was delivered, the tax bureau asked me to return the HST refund for the second property. What happened?
Because according to the tax bureau's understanding, as a long-term self-occupation, there can only be one property, not two, just like a person cannot step into two rivers at the same time, so the tax bureau has doubts about your purchase of two self-occupation properties in a year. Therefore, it requires you to return the HST refund for one of the properties. Of course, if you have special reasons, for example, I changed jobs within a year, so I need to buy another property somewhere else, then you can ask the tax bureau to re-determine.
Case 5: The new house I bought is worth more than $450,000, why can’t I get a full refund of the HST?
When the value of the house is 350,000, the federal tax refund can be up to 6,300 Canadian dollars, but the more expensive the house, the less tax you can refund, or even nothing. So when your house exceeds 450,000, the federal tax refund is zero, but the provincial HST refund is still available, with a maximum refund of 24,000 Canadian dollars.
Case 6: I am an overseas buyer without Canadian citizenship. I bought an investment property in Toronto for rental purposes. Can I refund the HST in this case?
Case 7: I am an overseas buyer. Since I do not have a legal status and rarely come to Canada, I signed a contract with a management company and leased the house back to the management company, which rented and managed the house on my behalf. In this case, can I get the HST back?
Case 8: I bought a pre-sale property for investment purposes. I was not able to rent it out immediately after delivery, and it was not rented out until the third year. Can I still get the HST back?
The eight cases we talked about today are questions we are often asked. I hope they are helpful to you. That’s all for today. See you next time.