Real Estate

HST Funds Calculation for Closing a Rental Property

  • Last Updated:
  • Apr 13th, 2020 11:19 am
[OP]
Newbie
Apr 12, 2020
1 posts

HST Funds Calculation for Closing a Rental Property

Hello Everyone,
I hope everyone is trying to stay safe in these unprecedented times.
I was hoping if someone could help me understand the HST on rental property. I have been getting some mixed information.
I booked a townhouse in Kitchener last year. (Who knew about these times ) – closing in Sept 2020.
Purchase price: 550K
As per purchase agreement HST is built in to the price
Since this is going to be a rental property I know I will have to pay HST upfront when closing, question is how much? I know HST is 13% Smiling Face With Open Mouth
1. Am I paying 507K plus 66K HST and will get 24K refund? – (Upfront HST funds I need is 66K?)
2. Am I paying 550K plus 24K HST? – (Upfront HST funds I need is 24K?)
3. Or there is something I am missing….
4. Also, as far as I know for rental property HST funds cannot be added to the mortgage amount - True?
I would really appreciate if someone could break it down for me that on closing day how much HST I am paying upfront excluding other closing costs.
Need to know the upfront cost of HST that I need to come up with for closing.
A million thanks!
2 replies
Newbie
Nov 15, 2019
59 posts
22 upvotes
If your original APS is $550k, on closing you are responsible for an additional $24k in HST that must be paid upfront, and then you can apply to CRA for the rebate to get that money back.

Usually, your mortgage funds do not cover this additional $24k in HST.

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