Real Estate

HST/GST, gut+rebuild

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  • May 9th, 2020 11:27 am
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[OP]
Jr. Member
Jan 27, 2018
151 posts
88 upvotes

HST/GST, gut+rebuild

Hi!

I'm not a flipper. I am looking to buy my 1st house, gut it completely (dig up basement, structural changes, etc..). I intend to use it as my principal residence. If I understood this correctly:
https://www.canada.ca/en/revenue-agency ... ebate.html

I do not need to pay HST, is this correct? Is this 13% my advantage over builders?
6 replies
Deal Addict
Feb 19, 2019
1026 posts
1383 upvotes
Stouffville ON
There is no sales tax on residential resale property.
Once your substantial renovation is completed you may qualify for the HST rebates on construction costs.
Full Time and Full Service Realtor
[OP]
Jr. Member
Jan 27, 2018
151 posts
88 upvotes
thanks! i can get a HST rebate on principle residence construction? wow, thanks for letting me know!
Deal Addict
Feb 19, 2019
1026 posts
1383 upvotes
Stouffville ON
deepzerg wrote: thanks! i can get a HST rebate on principle residence construction? wow, thanks for letting me know!
What will be the estimated market value of the property after all the renovations are done (land and building), and what province are you in?
Full Time and Full Service Realtor
[OP]
Jr. Member
Jan 27, 2018
151 posts
88 upvotes
senasena wrote: What will be the estimated market value of the property after all the renovations are done (land and building), and what province are you in?
Ontario. buying existing property for 1.0m, dropping 1m in, maybe worth 2.0m after reno?

the goal is not to make money, i dont have the cost advantage of builders, the main value is that i get to spec out the house the way i want it to.
Deal Addict
Feb 19, 2019
1026 posts
1383 upvotes
Stouffville ON
deepzerg wrote: Ontario. buying existing property for 1.0m, dropping 1m in, maybe worth 2.0m after reno?

the goal is not to make money, i dont have the cost advantage of builders, the main value is that i get to spec out the house the way i want it to.
Assuming your construction qualifies as substantial renovation from CRA perspective (a complete gut qualifies):
- You will not qualify for the federal portion of the sales tax rebate
- You will qualify for the provincial part of the rebate, mind you will not get all of the provincial portion of the hst back and the rebate will top out at the max of $16K, on the scale of your project it’s a drop in the bucket but better than nothing.
You will need to fill out the following forms.
https://www.canada.ca/content/dam/cra-a ... 91-19e.pdf
https://www.canada.ca/content/dam/cra-a ... ws-13e.pdf
https://www.canada.ca/content/dam/cra-a ... on-18e.pdf
Good luck with your project.
Full Time and Full Service Realtor

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