If you are buying a newly constructed home, as per current real estate laws, you will be eligible for a HST rebate. As of July 1 2010, the Province of Ontario implemented Harmonized Sales Tax (HST) which has two separate components:
– The federal GST of 5%;
– Province’s Retail Sales Tax (RST) of 8%.
The purchase price of newly constructed homes is subject to HST of 13%. Although, the GST rebate remains in effect, a Purchaser Rebate Program has been implemented to allow reduction of the RST component of the HST payable.
What is the GST Rebate?
New home buyers can apply for a 36% rebate of the federal portion of HST applicable to the purchase price to a maximum of $6,300.00 for homes with purchase price of $350,000.00 or less. The rebate on the federal portion of HST would be calculated proportionately if the purchase price is between $350,000.00 and $450,000.00. There will be no rebate of the federal portion of the HST if the purchase price is more than $450,000.00.
What is the HST Rebate?
New home buyers can apply for 75% rebate of the provincial portion of the HST applicable to the purchase price to a maximum of $24,000.00. This rebate applies to the first $400,000.00 of the purchase price. For purchase price above $400,000.00 this rebate is $24,000.00.
The HST rebate is only applicable to new homes. Resale homes are exempt from HST.
Check with your Real Estate Lawyer for any change in regulations.
Reach us @905-290-7205 for more information.