Beyond Bending Tell You How
If you’re in the market for a new home in Ontario, you may be eligible for a new housing rebate. This rebate is designed to help offset the cost of the Harmonized Sales Tax (HST) that you pay on a newly constructed or substantially renovated home. The rebate is available to both individuals and corporations, and it can be a significant amount of money. In this blog post, we’ll explain what the new housing rebate is, who is eligible to receive it, and how to apply.
What is the New Housing Rebate?
The new housing rebate is a rebate that is available to Ontario residents who have purchased a newly constructed or substantially renovated home. The rebate is designed to help offset the cost of the HST that is paid on the purchase of a new home. The rebate is equal to 75% of the provincial portion of the HST, up to a maximum of $24,000.
Who is Eligible to Receive the New Housing Rebate?
To be eligible for the new housing rebate, you must meet the following criteria:
- You must be a resident of Ontario.
- You must have purchased a newly constructed or substantially renovated home.
- The home must be your primary place of residence.
- You must have paid the HST on the purchase of the home.
What is Considered a Newly Constructed or Substantially Renovated Home?
A newly constructed home is a home that has never been lived in before. A substantially renovated home is a home that has undergone a major renovation that involves removing or replacing most of the interior of the home. The renovation must also have increased the value of the home by at least 90% of its original value.
How Do You Apply for the New Housing Rebate?
To apply for the new housing rebate, you must complete and submit Form RC7190-ON, which is available on the Canada Revenue Agency (CRA) website. You must also provide supporting documentation, such as a copy of the agreement of purchase and sale, and proof of payment of the HST.
Important Notes About the New Housing Rebate
- The new housing rebate is only available for homes that are purchased as a primary place of residence. It is not available for investment properties or vacation homes.
- If you are purchasing a new home with other people, such as a spouse or partner, you can each apply for the new housing rebate. However, the total amount of the rebate cannot exceed the maximum amount of $24,000.
- If you are purchasing a newly constructed home from a builder, the builder may apply for the new housing rebate on your behalf. In this case, the rebate will be credited to the builder, and the builder will pass the savings on to you.
- If you are purchasing a newly constructed home from a builder and the builder has already applied for the new housing rebate, you cannot apply for the rebate yourself.
- If you are purchasing a newly constructed home from a builder, the builder may have included the HST in the purchase price of the home. In this case, you will not have to pay the HST separately, and you will not be eligible for the new housing rebate.
Examples of the New Housing Rebate
To help you understand how the new housing rebate works, here are a few examples:
Example 1: Purchasing a Newly Constructed Home
John and Jane are purchasing a newly constructed home in Ontario for $400,000. The HST on the purchase of the home is $52,000. John and Jane are eligible for a new housing rebate of $9,000 each, for a total rebate of $18,000.
Example 2: Purchasing a Substantially Renovated Home
Sarah is purchasing a substantially renovated home in Ontario for $300,000. The HST on the purchase of the home is $39,000. Sarah is eligible for a new housing rebate of $7,500.
People Also Ask
How long does it take to receive the new housing rebate?
According to the CRA, it can take up to 8 weeks to process a new housing rebate application.
Can I apply for the new housing rebate after I have taken possession of my new home?
Yes, you can apply for the new housing rebate up to two years after taking possession of your new home.
What happens if I sell my new home before the end of the year in which I purchased it?
If you sell your new home before the end of the year in which you purchased it, you may have to repay a portion of the new housing rebate. The amount of the repayment will depend on how long you lived in the home before selling it.
