Recent stories in the news are highlighting the requirements for qualifying for an HST rebate. The Canada Revenue Agency (CRA) has begun demanding the repayment of HST rebates claimed by people who do not qualify for the rebate.
The Excise Tax Act states “if even a single registered buyer does not qualify for the new home HST rebate, then all the buyers are disentitled.” People who claim the house as their primary residence do not qualify for the rebate if a third party, such a cousin have been added to title of the home at the insistence of the mortgage holder, even when the third party is only on the home’s title to help the buyer or buyers to qualify for the loan. According to the CRA the following are people who are disqualified from receiving the HST rebate if the home or condo is not their primary residence:
- business associates
The rebate is disqualified if anyone on the home’s title is not closely related to the owner. The above list is examples are not considered to be closely related by the CRA.
To qualify for the HST rebate in Ontario the buyer must meet the following qualifications:
- the house is located in Ontario and the house is intended to be the primary place of residence for you or your relation
- if the purchase price for the house and the land if applicable before tax is less than $450,000, a provincial new housing rebate may be available even if a GST/HST new housing rebate for some of the federal part of the HST is not available
- you bought a new or substantially renovated house including a condominium unit or a renovated house that has also had a major addition
- you bought a non-residential property that was converted into a house from a builder, and you paid all of the GST/HST due on your purchase
- the builder sells you the house and land if applicable under the same written agreement;
- the house has not been occupied before ownership of the house is transferred to you after the construction or renovation is substantially completed
- if you made an exempt sale of the house before it is occupied by anyone
The following are approved as closely related by the CRA and are eligible to receive the new home rebate even if the property is not their primary residence:
If you have received an HST rebate that you did not qualify for, the CRA will allow you to voluntarily disclose the mistake and you are able to correct it before it becomes a serious issue. Don’t wait for the CRA to find the mistake, which they mostly likely will, contact the CRA to avoid being charged the accrued interest on the refund.
If you have questions about your HST rebate contact New Housing Rebate at (647) 847-7747 to make an appointment to receive professional tax advice.