Real Estate

HST Rebate - New Home Calculation (Ontario)

  • Last Updated:
  • Nov 23rd, 2020 8:08 pm
[OP]
Member
Apr 20, 2020
271 posts
232 upvotes

HST Rebate - New Home Calculation (Ontario)

My brother just found out his company is shifting employees around and closing one of their offices.

He is being moved from Oakville to Windsor. He is still debating to move or not or look for work in the GTA.

His issue is he and his wife bought a house pre-construction in Burlington Ontario that is closing in July 2021. He is debating just renting it out and closing on it and renting in Windsor if he moves that way.

The one question we have is how HST rebate works in his instance?

Will he owe any of the HST on top of his purchase price as the rebate changes if he rents it out.

The purchase price is 649K

The maximum rebate looks like it is 24K.

How do you estimate what the HST payable will be on his end beyond the reabte? He wants to know if there is something he will owe out of pocket, and how much it will be.
4 replies
Deal Addict
Feb 19, 2019
1964 posts
3087 upvotes
Stouffville ON
He will need to read the contract to confirm the details, but in most instanced the price quoted by the builder is inclusive of hst and rebate, therefore if the place won't be his principal residence he will pay to the builder additional $24K. If he finds a tenant on one year lease he will be able to claim the rebate from cRA, bottom line is he will be out of pocket $24K for couple of months or until he received the money back from cra, but the net result will be the same.
Full Time and Full Service Realtor
[OP]
Member
Apr 20, 2020
271 posts
232 upvotes
senasena wrote: He will need to read the contract to confirm the details, but in most instanced the price quoted by the builder is inclusive of hst and rebate, therefore if the place won't be his principal residence he will pay to the builder additional $24K. If he finds a tenant on one year lease he will be able to claim the rebate from cRA, bottom line is he will be out of pocket $24K for couple of months or until he received the money back from cra, but the net result will be the same.
He understands he would owe the 24K and claim it back once its a rental.

Would he owe anything out of pocket beyond that 24k?
Jr. Member
Apr 25, 2017
185 posts
140 upvotes
If I understand correctly, he's going to designate the pre-construction house as a rental property. In that case he'll have to pay the full HST on the property i.e. 13% of purchase price in ON (~85k) at the time of closing (on top of the other closing costs). Once he has drafted the long-term lease agreement, he can apply for the HST rebate which is I think around 24-26k max.
Deal Addict
Nov 23, 2003
2183 posts
661 upvotes
rtz416 wrote: If I understand correctly, he's going to designate the pre-construction house as a rental property. In that case he'll have to pay the full HST on the property i.e. 13% of purchase price in ON (~85k) at the time of closing (on top of the other closing costs). Once he has drafted the long-term lease agreement, he can apply for the HST rebate which is I think around 24-26k max.
Please don’t post nonsense.

Top