From July 1, 2010, new home sales in Ontario and BC will be subject to the new Harmonized Sales Tax (HST).
In Ontario, the existing 8% Provincial Sales Tax (PST) and 5% federal Goods and Services Tax (GST) will be combined to create the 13% HST.
In BC, the existing 7% Provincial Sales Tax (PST) and 5% federal Goods and Services Tax (GST) will be combined to create the 12% HST. However, there are government cost-savings initiatives that have been put in place to help home buyers, home owners and investors such as the GST/HST New Housing Rebate.
The GST/HST New Housing Rebate program provides a rebate on part of the GST or the federal part of the HST paid on the construction or purchase of most newly constructed or substantially renovated houses used as a primary place of residence.
If you purchase a home after July 1, 2010, you may qualify for the GST/HST New Housing Rebate.
GST/HST New Housing Rebate
The New Housing Rebate allows you to recover a part of the GST/HST that you paid on the purchase price or cost of building a new, or substantially renovated house.
What type of housing qualifies?
These types of housing qualify for the rebate:
o A house that you built, substantially renovated or on which you built a major addition on land that you own or lease (you can do the work yourself or hire someone to do it);
o A new mobile home (this includes a modular home) or a new floating home that you brought from a builder (this includes a vendor);
o A new or substantially renovated house (including a condominium unit) that you brought from a builder (building and land);
o A new or substantially renovated house that you bought where you lease the land from the builder under the same agreement to buy the house and the lease is for 20 years or more, or gives you the option to buy the land;
o A share of capital stock in a co-operative housing corporation (co-op) that you bought; or
o A non-residential property that you converted into your house
Whether you’re a first-time home buyer, a home owner planning to trade up, or you’ve decided to stay put, make sure you know about savings programs that benefit you.
For more information regarding the GST/HST New Housing Rebate, contact the Canada Revenue Agency (CRA) or visit their GST/HST information webpage.