HST on Principal Residence?/Rental Property?

Emily0123 wrote: ↑ I am purchasing a condo in Peel as a principal residence. The purpose of this purchase is really just to rent it out. I’ve been hearing mixed things about this.

GaryR28626 wrote: ↑ You can use the online HST rebate calculator to see how much you need to pay HST during closing (if declared as rental)

https://truecondos.com/calculators/hst- ... alculator/

OttawaGardener wrote: ↑ If you're not going to live in it, then it is not your principal residence. Be wary of what your Realtor says, s/he is not the CRA.

senasena wrote: ↑ It’s one or the other, it is a principal residence, or it is not.
When buying precon in majority of cases the purchase price includes hst on the purchase price net of hst rebate.
Let’s assume the condo price is $500K, if you are buying it as principal residence that is what you will be paying, in the documents you will see that you are assigning the hst government rebate of $24K to the builder.
If you are buying it as an investment you can’t assign it to the builder, so you will pay $524to the builder, however if you have 1 year lease agreement in place you will be able to file for the $24K rebate with cra and get it back in approx. 2 months. Your total spend will be exactly the same, but you will be 24K out of pocket until you get the rebate back from the government.
If you are buying it as principal residence there will be factors to determine if it is your primary residence, as per cra:
The following are examples of some of the factors we may consider to determine whether a house is your or your relation’s, primary place of residence for purposes of the new housing rebate: ■ whether you consider the house as your main residence; ■ the length of time you inhabit the premises; and ■ the designation of that address on personal and public records. To be eligible for the new housing rebate, your intent to use the house as your or your relation’s, primary place of residence must be evident at the outset of buying, constructing, or substantially renovating the house. For rebate purposes, a house is not your primary place of residence if, for example, your intention is to use the house as your primary place of residence upon some more distant occasion, such as retirement. Further, a recreational cottage or an investment property is not your primary place of residence for rebate purposes. No new housing rebate is available in these cases.
The bottom line is claim it properly, your realtor is wrong since your intent is to have it as rental property, you also don’t have to wait one year to rent it out.
How long do you plan on renting it out, do you own another principal residence?
Here is all the info you need to know regarding claiming the rebate.
https://www.canada.ca/content/dam/cra-a ... 10-16e.pdf

Emily0123 wrote: ↑ The purchase agreement states that the HST is included in the purchase price.

So do I pay the normal purchase price which includes the HST and then claim the HST after closing? How does this HST rebate really work? I’m understanding that the HST can be claimed from either principal residence or rental property but that their just claimed differently?

How do I go about this? Really confused, as this is my first property purchase.

Thanks for taking the time to read this, any advice would be appreciated.

licenced wrote: ↑ are you buying from the builder, i its an assignment or are you buying from someone else who already owns the unit?

The response to this depends on your answer to my question.

oasis100 wrote: ↑ You are talking about buying a resale...but then you confusing it with hst rebate for pre con sales..which does not apply to your situation. My guess is your realtor is doing a piss poor job of addressing your concerns hence why you are now on here asking these questions.

You basically want to commit fraud. Your mortgage provider is going to provide you a rate based on the property being your primary residence when in fact you are going to lease it out, rental property mortgage rates are higher.

I assume you are also going to be claiming first time home buyer land transfer rebate. One of the requirements of that program is you must occupy the home as their principal residence within nine months of the date of transfer. If you get audit and they find out you lied you can be fined up to $4000.

Emily0123 wrote: ↑ Ohh so I only have to worry about HST and HST rebates if it’s a preconstruction home? And yes my realtor says he is not familiar about rental rules/regulations. He said I can live in it for a bit and then decide to rent it out after and I’ll be fine.

That’s also part of my question, so how long do I have to occupy the home before I can rent it out under that plan?

licenced wrote: ↑ are you buying from the builder, i its an assignment or are you buying from someone else who already owns the unit?

The response to this depends on your answer to my question.

nucats wrote: ↑ i came across this thread.. my cousin buying a condo on assignment and plan to rent it out.. the seller says that "HST will be included in price" .. seller will be paying HST on deposit + profit. we are not sure if we still have to pay hst on closing and claim it back?