If you are buying a newly constructed home, as per current real estate laws, you will be eligible for a HST rebate. As of July 1 2010, the Province of Ontario implemented Harmonized Sales Tax (HST) which has two separate components:

–      The federal GST of 5%;

–      Province’s Retail Sales Tax (RST) of 8%.

The purchase price of newly constructed homes is subject to HST of 13%. Although, the GST rebate remains in effect, a Purchaser Rebate Program has been implemented to allow reduction of the RST component of the HST payable.

What is the GST Rebate?

New home buyers can apply for a 36% rebate of the federal portion of HST applicable to the purchase price to a maximum of $6,300.00 for homes with purchase price of $350,000.00 or less. The rebate on the federal portion of HST would be calculated proportionately if the purchase price is between $350,000.00 and $450,000.00. There will be no rebate of the federal portion of the HST if the purchase price is more than $450,000.00.

What is the HST Rebate?

New home buyers can apply for 75% rebate of the provincial portion of the HST applicable to the purchase price to a maximum of $24,000.00. This rebate applies to the first $400,000.00 of the purchase price. For purchase price above $400,000.00 this rebate is $24,000.00.

The HST rebate is only applicable to new homes. Resale homes are exempt from HST.

Check with your Real Estate Lawyer for any change in regulations.

The author of this article, Balvinder Kumar is a professional and reliable Real Estate Lawyer in Mississauga, helping you in your Real Estate matters in Mississauga, Brampton, Milton and GTA.

Reach us @905-290-7205 for more information.