• INVESTORS – HAVE YOU CLAIMED YOUR HST REBATE?

  • The Ontario New Residential Rental Property Rebate (NRRPR), is available to any investor in the province, who purchases a new home or condo to rent out. So if you are an investor, have you claimed your HST rebate yet?

    There are a few rules that one must follow:
    #1 – the buyer must close on the property first and then apply for the rebate
    #2 – if it is rental property, you must have a signed tenant lease and if you are purchasing as an owner-occupied property to live there, you must show ownership

    But is it that easy? Yes and No!

    There was a recent story in The Star, about the lady, who needed her uncle to help her qualify for the mortgage, however he never lived there nor made any payments on the mortgage – essentially a straw buyer! She applied for the HST rebate and was denied based on the fact that she did not have a direct blood relative on title. Mom, dad, sister, brother, and husband can be on title but not a non-blood relative and therefore she was denied.

    Now say you are buying a pre-construction home? Once you know the closing date or have finished renovations, you can apply for the rebate, however you must have a signed tenant lease.

    This can apply to a condo, townhome, house, cottage, duplex, triplex and fourplex. It does not apply to commercial properties or student rental properties. They must be residential in nature.

    If the home costs $350,000 or less, you can qualify for 36% of the federal portion of the HST; if the home is between $350,000 and $450,000 there is a sliding scale. There is no rebate on the federal portion after $450,000.

    For the provincial portion, everyone can apply for up to 75 per cent of the HST paid, to a maximum of $24,000. You can also apply for the rebates if you build your own home as well. Put that to work with the Purchase Plus Improvements program and you can see a lot of money coming back into your pocket!

    Most times the builder will let you know of the rebate or your realtor or even your real estate lawyer, however if you have not heard of it and you have purchased a property in the last two years, you may still apply for that rebate. Speak to your accountant or lawyer and if you don’t know a good one, reach out and I can refer you!