The Canadian Government designed an HST rebate on new homes to help those who paid HST during their purchase of land or $16,080 to those who did not. In Ontario, homeowners who have substantially renovated their homes are also eligible for these rebates. However, when it comes to proving their eligibility for the rebates, homeowners face difficulties. Homeowners who renovate their homes also face similar obstacles.
As the CRA (Canada Revenue Agency) stipulates several eligibility criteria, it is imperative to understand a few basic requirements to avoid confusion. Let’s review some of the HST rebate eligibility requirements for Ontario. The following qualify for HST rebates:
- You have purchased a new home or substantially renovated your existing one. If you build a home on leased lands, you can also qualify for rebates if the lease agreement is longer than 20 years.
- Purchased shares in a cooperative housing community with the intent of utilizing the unit as your or your relative’s primary residence
- Market value of constructed home falls under $450,000
Here is a complete breakdown of the eligibility criteria for claiming HST rebates.
Eligibility criteria HST rebates for new house owners
The main criterion for HST rebates in Ontario is that the property must be the applicant’s primary residence. If you do not provide enough documents to prove that you are the primary resident of the property, CRA will reject your rebate application.
Ensure your name appears on all personal and public records and gather enough documentation to prove your ownership. In addition to these, you must also take into account the following to claim HST rebates:
- The property you own cannot be flipped.
- You should not purchase the house to rent it out
- Ideally, you should be the first occupant of your new home
Eligibility criteria for HST rebates on home renovations
Only completely renovated interiors of the home are eligible for an HST rebate. This means that a rebate is only valid if 90% of the renovations have been done on the house. In addition, a major addition that can completely change the existing house will also qualify for a rebate. Major additions generally include adding a floor to the home that doubles its size.
HST rebate filing deadlines
HST rebates must be filed within two years of the property purchase or renovations. CRA typically rejects applications filed later than the deadline. It is ideal to file rebate applications with an authorized agency so that deadlines can be met.
However, in Ontario, the filing process can be prolonged for many reasons. As CRA requires accurate paperwork, homeowners must gather all essential documents, including building construction, interest, and land purchase charges, before deadlines. Any delay in these documents can jeopardize your rebate application.
HST rebates in Ontario
A new home buyer in Canada is entitled to 36% of the federal portion of HST that almost makes up 5% of the purchase price. Similarly, the pre-tax value of the property must be less than or equal to $350,000 to qualify. Homes priced between $350,000 and $450,000 pre-tax qualify for reduced rebates, and those over $450,000 qualify for no rebates. The maximum rebate for the federal HST portion is $6,300.