What You Need to Know About the New Home HST Rebate in Ontario
If you’re purchasing a new home in Ontario, you may be eligible for a financial break through the new home HST rebate. This rebate helps homeowners recover a portion of the Harmonized Sales Tax (HST) paid on a newly built or substantially renovated home. Understanding the HST rebate in Ontario can help buyers and builders make more informed financial decisions and maximize potential savings.
What is the HST Rebate for New Homes?
The HST rebate in Ontario is a financial incentive designed to reduce the tax burden on homeowners purchasing newly constructed properties. Since HST applies to new homes, the rebate allows buyers to recover a portion of the tax, making homeownership more affordable.
This program is available for individuals purchasing a newly built home from a builder, constructing a home themselves, or completing significant renovations. Investors purchasing new rental properties may also qualify under specific conditions.
Eligibility Criteria for the New Home HST Rebate
Not all properties or homeowners qualify for the new home HST rebate. To be eligible, the following criteria must be met:
- The home must be newly built, substantially renovated, or owner-constructed.
- The property must be used as a primary residence by the buyer or an immediate family member.
- The applicant must be the first occupant of the home.
- In cases of substantial renovations, at least 90% of the interior must be remodeled.
If you’re unsure whether your home qualifies, consulting a tax expert can help clarify your eligibility for the HST rebate in Ontario.
How Much Can You Get Back from the Rebate?
The new home HST rebate consists of both a federal and a provincial portion.
- The federal rebate allows homeowners to recover up to 36% of the federal portion of HST, with a maximum rebate of $6,300 for homes valued at $350,000 or less. Homes priced between $350,000 and $450,000 receive a reduced rebate, and properties over $450,000 do not qualify for the federal portion.
- The Ontario provincial rebate covers 75% of the Ontario portion of HST, with a maximum rebate of $24,000. Unlike the federal rebate, there is no price cap on eligibility.
This means that if your home qualifies, you could receive up to $30,300 back through the HST rebate in Ontario.
How to Apply for the New Home HST Rebate
Applying for the new home HST rebate requires proper documentation and timely submission. Here’s a step-by-step guide to ensure you complete the process correctly:
- Gather the Required Documents:
- Proof of purchase or construction (such as a purchase agreement or invoices for materials and labor).
- Proof of occupancy, such as utility bills or identification showing the home address.
- Completed rebate application forms: GST190 for federal rebates and RC7190-ON for provincial rebates.
- Complete the Application Forms:
- Ensure all information is accurate to avoid delays or rejections.
- Submit Your Application:
- Applications must be submitted within two years of the closing date or substantial completion of renovations.
- You can apply directly through the Canada Revenue Agency (CRA) or have a rebate specialist handle the process for you.
- Wait for Processing:
- It typically takes 6-8 weeks for the HST rebate in Ontario to be processed and refunded.
Common Delays and Mistakes to Avoid
Many homeowners experience delays in receiving their new home HST rebate due to minor errors in their application. Here are some common pitfalls to watch out for:
- Incomplete or incorrect forms.
- Lack of proper supporting documents.
- Applying after the two-year deadline.
- Not meeting the primary residence requirement.
To ensure a smooth process, consider consulting a rebate specialist who can help maximize your claim and ensure compliance with CRA regulations.
Frequently Asked Questions
Can I Get the HST Rebate If I Bought the Home for Investment Purposes?
Yes, investors who purchase new homes to rent out may still qualify for a new home HST rebate under the New Residential Rental Property Rebate (NRRP). However, they must meet specific conditions, including keeping the property as a rental for at least one year.
What Happens If I Sell My Home Shortly After Receiving the Rebate?
If you sell your home within a short period after claiming the HST rebate in Ontario, the CRA may determine that you did not meet the primary residence requirement. This could result in a request for repayment of the rebate.
Are There Additional Incentives Available for Home Buyers?
Yes, Ontario offers several other programs to assist home buyers, including the First-Time Home Buyer Incentive and land transfer tax rebates. These can be used alongside the new home HST rebate for maximum savings.
Maximize Your Savings with the HST Rebate
The HST rebate in Ontario is a valuable opportunity for new home buyers to recover a portion of the taxes paid on their purchase. By understanding the eligibility criteria, application process, and common mistakes to avoid, you can ensure you receive the maximum rebate amount possible.
Whether you’re buying a newly built home, completing major renovations, or constructing a house yourself, applying for the new home HST rebate can provide significant financial relief. If you’re unsure about your eligibility or how to apply, consulting a tax professional or rebate specialist can help streamline the process and ensure you receive your full entitlement.
