Real Estate

HST Payment and Rebate on Investment property

  • Last Updated:
  • Jan 11th, 2023 9:51 am
[OP]
Jr. Member
Jan 19, 2018
111 posts
48 upvotes

HST Payment and Rebate on Investment property

We have booked a rental property which will be closing in next few months.

The total house price is $676,000.
My question is that at time of closing, how much HST i will have to pay.

Is it 13% of 676,000 ?

How does the NRRP rebate works and how much of this HST payment we can get back with 1 year lease agreement.

Just trying to determine the amount of funds needed at closing.

Thanks..
10 replies
Newbie
Dec 1, 2019
46 posts
26 upvotes
Kanata
Assuming this is a purchase in Ontario, the price on your APS should be inclusive of HST - net of rebate. Meaning a majority of the 13% of the HST is already included in your price.

Therefore, the additional HST due on closing shouldn't be higher than $24K, but will be a calculation done by the builder's finance team or their lawyers. This is assuming you've stated to the builder that your intent for the property is to be an investment.

Once you close and successfully rent out the property (with a minimum 1-year lease signed), you can send a copy of the lease, with a copy of your final Statement of Adjustments (to prove you paid the additional HST as an investment) and completed CRA paperwork to CRA who will review and should send you back the rebate within 4-6 weeks (estimated). That rebate amount should be the extra HST that you had to pay on closing to begin with.

Hope that helps.
Deal Addict
Mar 22, 2010
3721 posts
1642 upvotes
Salute wrote: We have booked a rental property which will be closing in next few months.

The total house price is $676,000.
My question is that at time of closing, how much HST i will have to pay.

Is it 13% of 676,000 ?

How does the NRRP rebate works and how much of this HST payment we can get back with 1 year lease agreement.

Just trying to determine the amount of funds needed at closing.

Thanks..
whoa... where is your agent on this?
Sr. Member
Dec 19, 2010
868 posts
318 upvotes
Toronto, Ontario
rapashoo wrote: whoa... where is your agent on this?
assuming he bought pre-construction, there is likely no agent involved.
Deal Addict
Mar 22, 2010
3721 posts
1642 upvotes
jamieee wrote: assuming he bought pre-construction, there is likely no agent involved.
But then there is a lawyer who would normally assist on this. What I am getting at is OP seems to be very new to this and he must be given solid information.
Deal Addict
Nov 22, 2004
1594 posts
717 upvotes
Salute wrote: We have booked a rental property which will be closing in next few months.

The total house price is $676,000.
My question is that at time of closing, how much HST i will have to pay.

Is it 13% of 676,000 ?

How does the NRRP rebate works and how much of this HST payment we can get back with 1 year lease agreement.

Just trying to determine the amount of funds needed at closing.

Thanks..
DiscountDunk is correct. The links below should help you with the exercise but you're looking at $24k in HST payments:


As for estimating closing costs, you'll have land transfer tax, development charges/school/park levies, HST, tarion enrolment, utility meters, property tax (if not covered by the builder), lawyer fees. Add about $3k~$4k buffer for additional fees for small amounts that add up, but I believe I've covered the big ticket items.

All the best
CPA. Investor. Realtor @ Royal LePage Ignite Realty
[OP]
Jr. Member
Jan 19, 2018
111 posts
48 upvotes
Thanks a ton, this is exactly what i was looking for.
Was just trying to budget, how much money i will need at time of closing..
I
Jr. Member
Nov 25, 2016
191 posts
164 upvotes
It should be included in the price, ask your agent to confirm.
Newbie
Jul 24, 2018
74 posts
70 upvotes
Salute wrote: Thanks a ton, this is exactly what i was looking for.
Was just trying to budget, how much money i will need at time of closing..
I
You get correct to the point info above.

Few points. 24k approx you will pay at closing. (Not interm closing). You can rent during interm closing assuming builder allowed it.
Cra paperwork filled, safely assume 1 year wait to get back 23500
Newbie
Dec 1, 2019
46 posts
26 upvotes
Kanata
GCSingh wrote: You get correct to the point info above.

Few points. 24k approx you will pay at closing. (Not interm closing). You can rent during interm closing assuming builder allowed it.
Cra paperwork filled, safely assume 1 year wait to get back 23500
Some builders (in Ottawa at least) will collect the additional HST on interim closing - often times in order to allow you to rent out the property during that interim period. Best to have your lawyer inquire if your builder will for sure collect it a Final closing or perhaps at Interim. Assuming this is for a high-rise condo and you've already provided 20% deposit to the builder, then no further deposit will probably be collected at Interim closing - however, if it's not a high-rise condo and/or you have not provided 20% in deposit to date to the builder, then they might also expect a top up to that % to be collected upon Interim closing as well.
Jr. Member
Nov 15, 2019
109 posts
48 upvotes
Assuming this is a typical agreement of purchase and sale in Ontario, you will pay $24k on final closing, and then apply for the $24k rebate from CRA.

I am a tax lawyer, and I assist clients applying for HST rebates, including clients who are facing audits, etc. Here's a blog post I wrote on HST rebates: https://trevorklaw.com/gst-hst-rebates- ... purchases/

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