Real Estate

New residential rental property rebate

  • Last Updated:
  • Jul 25th, 2022 3:49 pm
[OP]
Newbie
Sep 1, 2005
98 posts
9 upvotes

New residential rental property rebate

Hello Everyone,
Here is what happened.
Booked Condo in 2012 -- $372K
Closing 2019 - Paid $5458.55 as Federal Portion for HST

Now CRA says that the fair value has gone above 450K so i will not get any Federal portion back.

Any thoughts.

Thanks
16 replies
Deal Addict
Feb 19, 2019
1820 posts
2800 upvotes
Stouffville ON
Unfortunately you are out of luck, it is based on the market value not the cost.
https://www.canada.ca/en/revenue-agency ... P314_27869
Section D – Rebate calculation
If the fair market value of the house, including the land, is $450,000 or more, do not complete Section D since you are not eligible to claim a GST/HST new housing rebate for some of the GST, or federal part of the HST.
Full Time and Full Service Realtor
Sr. Member
Jul 4, 2018
510 posts
448 upvotes
man_Canada wrote: Hello Everyone,
Here is what happened.
Booked Condo in 2012 -- $372K
Closing 2019 - Paid $5458.55 as Federal Portion for HST

Now CRA says that the fair value has gone above 450K so i will not get any Federal portion back.

Any thoughts.

Thanks

It happened to my purchase.
Bought for 340, by The time of closing paid 25k plus as HST
But CRA said they would give only 19k, said current market price is 500.

Then I picked up few sold listings of 500 range and said they are all higher floors, premium upgrades, view premiums and said my condo value may be 420.
Then they gave 21
Member
User avatar
Aug 11, 2019
207 posts
219 upvotes
Toronto
How long did the entire process take for you?

I’ve spoke to them last week in regard to an application I submitted in December, and they said it’s waiting to be audited and could take 6 months.
Full Time Realtor
GTA & Surrounding Areas
Member
Mar 29, 2016
209 posts
183 upvotes
Toronto
Which number do you guys call to follow up with CRA for NRRP rebate?
I've submitted one beginning of January but have not heard any updates yet
[OP]
Newbie
Sep 1, 2005
98 posts
9 upvotes
In my case current listing is for 580K so can't argue that in sep it was less than 450k

Lavaris1 wrote: It happened to my purchase.
Bought for 340, by The time of closing paid 25k plus as HST
But CRA said they would give only 19k, said current market price is 500.

Then I picked up few sold listings of 500 range and said they are all higher floors, premium upgrades, view premiums and said my condo value may be 420.
Then they gave 21
Sr. Member
Jul 4, 2018
510 posts
448 upvotes
Dayravi wrote: How long did the entire process take for you?

I’ve spoke to them last week in regard to an application I submitted in December, and they said it’s waiting to be audited and could take 6 months.
Around 5 months
Jr. Member
Sep 18, 2007
131 posts
14 upvotes
Toronto
same here. bought in 2014, closed in 2019. FMV is over 450k now. so i couldn't get the full amount back.
not only that, but since i signed the leased back program with the builder, i'm consider as self supply, (i.e. builder).
so i might still owe them HST. gosh!!!
anyone have the same situation?
You Might Owe The CRA Thousands Of Dollars!
Newbie
Nov 28, 2020
4 posts
1 upvote
Hey, looks like I am in the same situation. Did this ever get resolved for you?

What happens when they consider you a builder? Did they not give you a HST rebate at all? and then charge you HST on the full FMV? That's insane.
Newbie
Nov 28, 2020
4 posts
1 upvote
Did the not give you back any rebate at all? or just the GST/federal portion?
Deal Guru
Jun 26, 2011
14935 posts
5161 upvotes
GTA
ciecie wrote: same here. bought in 2014, closed in 2019. FMV is over 450k now. so i couldn't get the full amount back.
not only that, but since i signed the leased back program with the builder, i'm consider as self supply, (i.e. builder).
so i might still owe them HST. gosh!!!
anyone have the same situation?
You Might Owe The CRA Thousands Of Dollars!
Also curious...how much DID you get back?
Jr. Member
Sep 18, 2007
131 posts
14 upvotes
Toronto
i don't have back any plus have to pay for interest i owe because i was deemed to sell it at FMV instead of the purchase price i paid.
everyone . Be careful with leased back agreement. or it's just me because the condo price has inflated so much between 2014-2019 :(
RolandCouch wrote: Also curious...how much DID you get back?
Deal Guru
Jun 26, 2011
14935 posts
5161 upvotes
GTA
ciecie wrote: i don't have back any plus have to pay for interest i owe because i was deemed to sell it at FMV instead of the purchase price i paid.
everyone . Be careful with leased back agreement. or it's just me because the condo price has inflated so much between 2014-2019 :(
I'm confused. You were deemed to have sold it but aren't you still the owner?

I guess what I'm wondering is if you did not do leaseback and got your own tenant, what would the tax implications on the rebate be in that situation?
Jr. Member
Nov 15, 2019
109 posts
48 upvotes
Leasebacks are complicated. Builders should be aware of the situation, because CRA has made their position clear since 2014.

I am a lawyer focusing on HST rebates, and I am currently dealing with several clients who have signed leasebacks.
Newbie
Nov 28, 2020
4 posts
1 upvote
Don't you still get back the Ontario portion of the rebate though? That's capped at 24k regardless of FMV of the property.
Newbie
Jul 22, 2022
5 posts
4 upvotes
ciecie wrote: same here. bought in 2014, closed in 2019. FMV is over 450k now. so i couldn't get the full amount back.
not only that, but since i signed the leased back program with the builder, i'm consider as self supply, (i.e. builder).
so i might still owe them HST. gosh!!!
anyone have the same situation?
You Might Owe The CRA Thousands Of Dollars!
Hi there,
I stumbled upon this thread from a while ago - and I am entangled in the same 'leaseback' trap as well! Disappointed Face

Here's my situation:
- Purchased condo with leaseback agreement with builder for $327K and paid $42K in HST upon closing in Jun 2021
- Upon applying for HST Rebate, CRA invoked rule on 'self supply' and asked for FMV as of Sep 2020 (i.e. when lease agreement signed)
- CRA subsequently agreed to FMV in Sep 2020 of $359K, meaning HST owing would be $46K
- CRA agent also advised that I would be eligible for HST rebate of $25K

Fast forward to 3 months and I just received a NOA from CRA with a shocking $27'000 balance owing!!

Looking through the Statement of Adjustments, it appears that they have taken no credit whatsoever for the $42K in taxes that I already paid upon closing. The balance owing is based on the 'new' $46K in re-assessed HST owing, minus $25K in HST rebate, leaving me with an amount owing of $21K + $6K in arrears/interest.

Is this correct? Shouldn't the HST owing essentially be (New HST owing) - (HST Already Paid), i.e. $46K - $42K = $ 4K? If coupled with my $25K HST rebate, I should actually be getting a refund of $21K.

Or is it normal for CRA to apply the 13% HST owing twice over (once for self-supply and again upon formal closing)??
Jr. Member
Nov 15, 2019
109 posts
48 upvotes
I would have to look at the exact documents. I would think that the FMV CRA imputed to the property is higher than the $359k amount you have cited.
Talleregg wrote: Hi there,
I stumbled upon this thread from a while ago - and I am entangled in the same 'leaseback' trap as well! Disappointed Face

Here's my situation:
- Purchased condo with leaseback agreement with builder for $327K and paid $42K in HST upon closing in Jun 2021
- Upon applying for HST Rebate, CRA invoked rule on 'self supply' and asked for FMV as of Sep 2020 (i.e. when lease agreement signed)
- CRA subsequently agreed to FMV in Sep 2020 of $359K, meaning HST owing would be $46K
- CRA agent also advised that I would be eligible for HST rebate of $25K

Fast forward to 3 months and I just received a NOA from CRA with a shocking $27'000 balance owing!!

Looking through the Statement of Adjustments, it appears that they have taken no credit whatsoever for the $42K in taxes that I already paid upon closing. The balance owing is based on the 'new' $46K in re-assessed HST owing, minus $25K in HST rebate, leaving me with an amount owing of $21K + $6K in arrears/interest.

Is this correct? Shouldn't the HST owing essentially be (New HST owing) - (HST Already Paid), i.e. $46K - $42K = $ 4K? If coupled with my $25K HST rebate, I should actually be getting a refund of $21K.

Or is it normal for CRA to apply the 13% HST owing twice over (once for self-supply and again upon formal closing)??

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