How Rebates Work With Pre-Construction Homes

Main-floor interior of Ontario pre-construction home

Did you know that if you buy a newly constructed home from a builder and use it as your (or a family member’s) primary residence, you will receive a GST/HST rebate in Ontario? Unlike when you purchase a new residential rental property or undergo substantial renovations and have to apply for the rebate yourself through the Canada Revenue Agency (CRA), the builder will apply for the HST rebate for your pre-construction condo or home on your behalf.

Because rebates can be a bit confusing, especially when it comes to determining eligibility, we’re going to go over how the rebate works when purchasing a new home, whether it’s pre-construction or a new residential rental property.

How The GST/HST Rebate Works When Purchasing A Pre-Construction Condo Or Home

Again, it’s important to note that a rebate expert cannot help buyers apply for the GST/HST Rebate when it comes to pre-construction condos or homes. The rebate program will be left up to the builder to lay out in the Purchase Agreement in an effort to assist home buyers by reimbursing them a portion of the harmonized sales tax (HST) of the sale (13%). All builders include the HST amount into the final purchase price of a home and reduce the amount due at closing by the amount of the rebate. In order to have that rebate given to them, buyers must indicate that they, or an immediate family member such as a parent or sibling, will be the principal resident of the brand new home in order to be eligible to receive the HST rebate.
Row of pre-construction homes with exposed rooves and scaffolding
This means that if investors are purchasing for the purpose of renting, they will not qualify for the HST rebate on new condos or homes. Investors will be required to pay an amount equivalent to the rebate upfront at the time of closing. This is where the New Residential Rental Property Rebate (NRRPR) will come into play.

How To Receive The HST Rebate In Ontario As An Investor

If you’re a real estate investor in Ontario, you’re still in luck. If you are going to buy a new property for the purpose of renting it out, you may be eligible to receive the New Residential Rental Property Rebate after applying to the CRA.
You are eligible to apply for the new residential rental property rebate if you:

You must apply within two years from the closing date to apply for the rebate, otherwise, you are no longer eligible. The maximum rebate amount you can be eligible to receive is $30,000.

If you need assistance gathering the correct information, filling out the forms, and dealing with the CRA, you should seek help from a professional. This is where Sproule + Associates can come in. While they cannot assist those who have purchased a new home or condo from a builder, they can assist investors, those who have undergone substantial renovations, or who have built their own house. Investors who purchased a multi-residential property are also eligible for the HST rebate, however, the process is a lot more complex; another reason why you should ask a professional for help.

Wooden tiles arranged to spell "rebate"

How Long Does It Take To Receive A Rebate In Ontario?

While a few things can affect how long it takes to receive your HST rebate, you can typically expect to receive it anywhere from 6-8 weeks unless you are subjected to an audit. If you have, for any reason, been denied the rebate, Sproule + Associates can file a Notice of Objection on your behalf.

Have You Built A New Home Instead?

If you have built a new home or hired someone to build your new home for you in Ontario, you can still qualify to receive a GST/HST New Housing Rebate. Within two years of completing your owner-built home, you can receive a maximum rebate of up to $30,000, so it’s important to remember to keep all of your receipts where you paid HST on labour, materials, and other invoices. You can also qualify for the new housing rebate if you:

The Bottom Line

Whether you’re a first-time home buyer or have been in the real estate market for years, you can qualify to receive a rebate after buying a new home from a builder. In almost all instances the HST is included in the purchase price. If you’re an investor, you can still qualify for a rebate but will not go through the builder. This is where you can rely on a rebate expert like Sproule + Associates to assist you with the process. If you purchase a new home in hopes of renting it for one year, you can receive an NRRPR.
Ontario homeowner signing document to apply for HST rebate
Applying for a rebate can be confusing, but it doesn’t have to be. If you haven’t bought a new rental property or converted a new home into a rental property, undergone substantial renovations or built a home addition, or have completed an owner-built home, contact Sproule + Associates today. We are dedicated to customer service and helping clients get their hard-earned money back in their pockets. Even if you just have a question about how rebates work in the first place, we’d be happy to go over that with you.
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Interested in finding how much you can get back?

If you've recently undergone substantial renovations, built or hired someone to build an addition, built or hired someone to build a new home, or purchased a new residential rental property, you can receive money back from the government. Use our free calculator to find out how much you qualify for.

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