GST/HST New Housing Rebate
The CRA has been cracking down on GST/HST New Housing Rebate claims and even conducting audits. Here’s what to do.
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GST/HST Rebates for Newly Built Homes
Unlike pre-owned residential property, Canadian taxpayers who purchase a newly built home need to pay GST/HST.
However, the GST/HST New Housing Rebate and the GST/HST New Residential Rental Property Rebate allows Canadians to recover a portion of the tax paid for a new or substantially renovated house, subject to some conditions. These rebates refund 36% of the federal portion of the 5% HST, up to a maximum of $6,300.
In addition to this, eligible buyers can also receive a refund on the provincial portion of their HST. For example, residents of Ontario claiming the new housing rebate can receive a refund of 75% of the 8% provincial tax, up to $24,000.
Who Can Claim GST/HST Rebates?
GST/HST New Housing Rebate
The New Housing Rebate is available to individuals who purchase a home with the intention of making it the primary place of residence for either themselves or a relation. While the rebate is typically claimed by the builder of the unit on behalf of the buyer, and adjusted in the final purchase price, individuals may also file for the rebate independently (such as those who build their own home).
Some instances which would qualify for the rebate include:
- purchasing a newly constructed home or condominium,
- building or contracting a third party to build a house,
- rebuilding a home destroyed by a natural disaster,
- converting non-residential property into a home, or
- buying shares in a newly constructed cooperative housing project.
Although this is a non-exhaustive list, the main consideration is whether the property was purchased with the intention of making it a primary place of residence.
Claimants may be asked to provide proof of occupancy to supplement their application. The CRA looks at factors such as the length of time that the property is inhabited, designation of that address on personal and public records, and whether the inhabitant(s) themselves consider the property as their primary residence.
GST/HST New Residential Rental Property Rebate
The New Residential Rental Property Rebate is meant for taxpayers who purchase a new property to earn rental income from that property. Landlords, including individuals, corporations, and builders, can qualify for the rebate if they paid GST/HST on the purchase or self-supply of a new or significantly renovated residential building.
Unlike the New Housing Rebate, purchasers must apply for the New Residential Rental Property Rebate independently. Landlords must also ensure that their property is leased for a minimum of at least one year before disposition, otherwise, the rebate may have to be repaid.
How to Apply for a Residential Rebate
Applying for the Residential Rebate
Our team of experienced professionals can help file a residential rebate application for qualified taxpayers. After submitting the initial application on behalf of our clients, we follow up by ensuring that the CRA is provided with the necessary documentation to corroborate our clients’ qualification for the rebate. Our services include investigating your circumstances and qualification for the relevant residential rebate, providing you with advice on strategy, drafting and submitting your application, and handling all subsequent correspondence with the CRA until a decision is rendered.
Being Audited for a Claimed Rebate?
Sometimes the CRA can audit residential rebates already claimed for accuracy. The CRA may ask for documentation that claimants are residing in the property, such as utility bills or official correspondence being sent to that property. However, audits can be stressful and intimidating. Our experts can assist by providing guidance and advice on navigating the audit, attending relevant meetings with the CRA, corresponding with CRA auditors on your behalf, identifying discrepancies in the audit, and responding to all related audit proposals until the audit is concluded.
In the event that a rebate claim is incorrectly denied, it is necessary to file a dispute immediately to the Appeals Division of the CRA or the Tax Court of Canada. Our team of ex-CRA, lawyers, and accounting professionals have the knowledge and experience to secure your rebate. Our comprehensive service includes drafting and submitting arguments to the CRA/Department of Justice, conducting the necessary due diligence on your file, researching the relevant statutes and case law to support your position, reviewing and analyzing all internal reports of the CRA related to your rebate to find discrepancies in your favour, and corresponding with the CRA/Department of Justice over the course of the tax dispute until a decision is rendered.
Let Us Solve Your Problems
Our team of ex-CRA staff, lawyers, and accountants brings extensive experience to advise you on your GST/HST Rebates issues. We are committed to supporting you throughout the entire process and are here to help at every step of the way.
Contact us to learn more about how we can help.
Farber Tax Solutions can help you successfully deal with CRA problems. We utilize the experience of our tax experts to:
- 1| Offer a comprehensive solution that is focused on achieving the most favourable possible outcome for your tax issue;
- 2| Communicate with the CRA on your behalf and navigate the entire CRA dispute process; and
- 3| Offer a complete solution to your tax problems, including ex-CRA professionals and tax lawyers from Farber Tax Law.
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