If you bought a new or substantially renovated home, you may be entitled to a tax refund.
As a consumer, you pay 13% Harmonized Sales Tax (HST) on most goods and services in Ontario. HST is a hybrid sales tax consisting of both federal and provincial sales taxes. As of June 2010, HST is now also payable on all new home sales in Ontario. However, you may be entitled to a rebate.
Am I eligible?
You may be eligible if you bought, built, or substantially renovated an existing house.
This could include residential condominium units, duplexes, mobile or modular homes, or floating homes. You may also be eligible if you built a major addition, or if you converted a non-residential property for residential use. You may also be eligible if you bought a share of the capital stock of a co-operative housing corporation (co-op).
You may not need to live in this home yourself. You may be eligible if the home is to be occupied by a relation—however, there are particular rules about who qualifies.
You are likely not eligible if you are in the business of manufacturing or reselling homes, or if you are a corporation or partnership.
How much is the refund?
The federal component of the HST rebate is available in every province. Certain provinces—including Ontario—also offer a rebate on the provincial component of the HST.
The amount of your refund will vary based on the province in which you live, and the fair market value of your home. In Ontario, where the fair market value of your home falls within the following brackets, you may be entitled to the following rebate:
- Below $350,000: the potential rebate is 36% of the federal tax, and 75% of the provincial tax.
- From $350,001 to $449,999: the potential rebate is up to 35.9% of the federal tax on a sliding scale, and up to 75% of the provincial tax to a maximum of $24,000.
- $450,000 and above: the potential rebate is $24,000.
Is there a deadline?
Yes! You have two years to apply.
The date upon which the clock starts ticking depends on the nature of your situation, and the circumstances of your purchase or renovation. Double-check the rules and do not miss your chance to apply for your refund.
How do I apply?
For complete instructions, review the official Guide from the Canada Revenue Agency (CRA) on the GST/HST New Housing Rebate. (You can also download it in PDF).
There are two separate rebates for the federal and provincial components. If you live in Ontario, be sure to apply for both rebates.
- For the federal rebate, complete either Form GST191 or Form GST191-WS, depending on your situation.
- For the Ontario rebate, complete Form RC7191-ON.
Due to the COVID pandemic, it is possible that the CRA will be evaluating rebate applications with greater scrutiny. Be certain that you follow the rules and regulations in your application to ensure that you have the greatest chance of successfully claiming your rebate.
For more information, assistance, or any other questions regarding new home purchases, renovations, or other real estate transactions, please contact our real estate lawyers today. Do not delay.