Welcome to another article in our GBA-LLP.ca education series, ‘Special Tax Topics.’ Today, we will delve into a topic that has raised many eyebrows, yet it remains shrouded in an aura of complexity – the GST/HST New Housing Rebate.
To start, let’s talk about what we know. The Goods and Services Tax (GST) or the Harmonized Sales Tax (HST) New Housing Rebate is a federal initiative aimed at making homeownership more affordable. This rebate allows individuals to recover part of the GST or the federal part of the HST paid for a new or substantially renovated house that is used as the buyer’s or their relation’s primary place of residence, given that all eligibility conditions are met.
To qualify for the rebate, a house must meet several criteria. It must be new or significantly renovated, used as a primary place of residence, and the buyer must take possession of the house within the specified time. The buyer can be an individual, a co-operative housing corporation, or a partnership.
Applying for the GST/HST New Housing Rebate involves filling out specific forms provided by the Canada Revenue Agency (CRA), such as the GST190 and GST191. These forms need to be filed within two years from the end of the month in which the HST was payable. The application process might seem daunting, but with the proper guidance, it becomes manageable.
Now, let’s move to the grey area – what we don’t know or what often confuses people about the GST/HST New Housing Rebate.
One of the most challenging aspects of this rebate is defining what constitutes a ‘substantial renovation.’ According to the CRA, a substantial renovation means that 90% or more of the interior of a building has been removed or replaced. However, the specifics can be confusing. Your trusted tax professional can discuss your situation and provide personalized advice.
The last major uncertainty revolves around the provincial part of the HST. While the federal portion of the HST is usually eligible for the rebate, the provincial part varies across provinces. Some provinces have a provincial housing rebate (such as Ontario, where we are headquartered), but the eligibility requirements and rebate amounts can differ from the federal program.
While the GST/HST New Housing Rebate is a fantastic initiative for homeowners, it’s a field rife with complexities. Our aim with this blog post is not to intimidate but to enlighten you about the intricacies of this program.
Remember, professional advice can make a huge difference in how you navigate these waters. Reach out to your trusted tax professionals for personalized advice tailored to your unique circumstances. Stay tuned to our ‘Special Tax Topics’ series for more insightful discussions.
Disclaimer: The information provided in this blog post is intended for informational purposes only. It is not a substitute for professional advice, and we strongly recommend consulting with a tax professional before making any decisions based on this information.
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This blog is not meant to provide specific advice or opinions regarding the topic(s) discussed above. Should you have a question about your specific situation, please discuss it with your GBA advisor.
GBA LLP is a full-service accounting firm in the Greater Toronto Area, but we primarily service all of Ontario as well as the rest of Canada virtually, except Quebec. Our team of over 30, provides Audits and Reviews of financial statements, and Compilations of financial information, as well as corporate tax returns. We provide specialized corporate tax and succession planning for small and medium businesses, in addition to general advisory services.
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