What you should know about HST New Housing Rebate

 

The most popular choice among home buyers is to purchase from a builder. Whether condo or detached house, it is estimated that one third of all houses sold in Canada are brand new. This seems to be a major trend especially in city’s such as Ontario. The reason why many buyers prefer to purchase from the builder is that they are provided with the possibility of customising the dream home according to their personal tastes. Compared to old homes, newly built condos and houses are higher energy efficient, not to mention the building materials are of higher quality. However, new purchasers are rarely aware of the fact that there is a new home buyer tax rebate.

What is HST New Housing Rebate?   

This program sponsored by the government that offers a refund for when you purchase a new home. Taking into consideration that many federal taxes have been imposed on new home buyers, properties are consequently more expensive. To alleviate financial pressure the rebate program was introduced to help purchasers surpass this financial burden. Basically, the buyer is able to recover up to 36% of the federal portion of the HST. Any individual who buys a property with the intention of using it as a primary source of residence is entitled to the refund. If the value of the property is priced between $350,000 and $450,000, then the rebate is reduced substantially.

Are renovated houses included?

The buyer is also provided the opportunity to claim a rebate on the purchase of a renovated house. The reason foot his is that houses that have suffered substantial renovation are considered new ones. However, the extent of the modifications has to reach 90% of the building exterior. Major renovations are considered doubling the floor space or making an addition. In terms of physical changes, the walls or the cabinets and countertops have to be modified at least 50%. If you take the case of a property that has upstairs extension that makes room for a new bedroom and bathroom, then this is a major home renovation.

How long do you have to inhabit the property?

The eligibility of the individual depends on whether he plans to use the property as a primary source of residence for himself or a close relative. These intentions matter only at the moment of the transaction. In addition to this, the period the owner is required to stay in the house is a matter of individual circumstances.

Who claims the rebate?

The builder is the one who is generally required to apply for the rebate if the discount is incorporated into the price of the house. This will enable them to pay the housing refund to the individual purchaser. In the case the builder has neither paid nor credited the discount at the time of the purchase, then the individual has no choice but to make the application with the government. To make the process go a lot smoother and faster, owners can hire a professional and obtain the HST right away.