Real Estate

HST/GST, gut+rebuild

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  • Jul 7th, 2022 8:34 am
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May 8th, 2020 10:48 pm
deepzerg [OP]
Member
Jan 27, 2018
203 posts
199 upvotes

May 8th, 2020 10:48 pm

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?
9 replies
May 9th, 2020 7:24 am
senasena
Deal Addict
Feb 19, 2019
2100 posts
3448 upvotes
Stouffville ON

May 9th, 2020 7:24 am

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
May 9th, 2020 10:30 am
deepzerg [OP]
Member
Jan 27, 2018
203 posts
199 upvotes

May 9th, 2020 10:30 am

thanks! i can get a HST rebate on principle residence construction? wow, thanks for letting me know!
May 9th, 2020 10:49 am
senasena
Deal Addict
Feb 19, 2019
2100 posts
3448 upvotes
Stouffville ON

May 9th, 2020 10:49 am

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
May 9th, 2020 11:00 am
deepzerg [OP]
Member
Jan 27, 2018
203 posts
199 upvotes

May 9th, 2020 11:00 am

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.
May 9th, 2020 11:21 am
senasena
Deal Addict
Feb 19, 2019
2100 posts
3448 upvotes
Stouffville ON

May 9th, 2020 11:21 am

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.
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Jul 7th, 2022 8:24 am
Biscayne05
Deal Addict
Apr 10, 2017
2914 posts
2010 upvotes

Jul 7th, 2022 8:24 am

Dropping 1M. I want to see this! That's a large budget.
Jul 7th, 2022 8:34 am
TorontoHSTRebates
Jr. Member
Nov 15, 2019
113 posts
48 upvotes

Jul 7th, 2022 8:34 am

I recommend planning how to deal with GST/HST in advance of the project, especially if you have not yet bought the land, as there are tax planning opportunities available.

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