GST/HST Rebate Calculator
When you buy a pre-construction property in Canada, you are required to pay sales tax which is made up the federal GST (5%) and provincial GST (varies by province) and you may be eligible to get some of this back by filing a rebate with the CRA.
GST/HST Rebate on Rental Units & Principal Residences
If you buy a property as your principal residence, the GST/HST Rebate may be assigned to the Developer who automatically credits the buyer with the rebate amount at closing, so that you don’t pay anything out of pocket. However if you are an investor, you have to pay the rebate amount upfront, in cash at closing - but don't worry, if you rent out the property for at least 1 year, you are usually eligible to get the rebate back and it becomes a cash-flow item, not a true expense.
NOTE:
In Alberta, the GST Rebate (up to $6300) is typically included in the purchase price advertised by developers..
In Ontario, the HST Rebate (up to ~$27k) is NOT included in the purchase price advertised by developers and is extra cash you need at closing.
How Do I Quality for the GST/HST Rebate?
Typically the investment must meet all of the following criteria:
The unit is a self-contained residential unit
You have possession of the unit with a Purchase and Sale agreement.
You have closed on the unit and have legal title
You rent the unit for at least 1 year
How is the GST/HST Rebate Calculated:
The rebate is based on the purchase price of the property.
GST Rebate Calculation
The GST portion has a maximum benefit of $6,300, reached at a purchase price of $350k before GST. For purchase prices higher than this, the GST rebate declines until it reaches $0 at a purchase price of $450k before GST, where there is no rebate available.
Purchase Price <= $350k = GST Paid x 36%
Purchase Price: $350k to $450k = ( $450,000 - Purchase Price ) / 100,000 * $6,300
Purchase Price: >$450k = $0 (no Rebate is available)
HST Rebate Calculation
The HST in Ontario includes the GST portion described above, and a provincial portion that has a maximum benefit of $24,000, reached at a purchase price of $424,850. The provincial rebate is capped at $24,000 for purchase prices above this amount.
75% of PST (7%) up to a maximum of $24,000 (reached at $424,850) + GST Rebate portion
The maximum HST Rebate is ~$27,000, achieved at a purchase price of ~$400,000.
How do you Apply for the GST/HST Rebate?
The following documentation is required by the Canada Revenue Agency (CRA)
Copy of Purchase & Sale Agreement
Copy of Statement of Adjustments
Copy of 1 Year Residential Lease
Signed GST/HST Rebate Application Form
Don’t have the patience or time to deal with it? I work with partners that specialize in completing rebates, so contact me and I will put you in touch with a professional to assist you.
View complete details on the CRA website: Principal Residence or Rental/Investment Property.