Ontario New Housing Rebate

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Ontario New Housing Rebate

Canada Revenue Agency’s (CRA) 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 have built or bought a new condo, town home or a house in the LAST TWO YEARS; or substantially renovated your home, you may be eligible for thousands of dollars in Ontario new housing rebates!

  • If you bought a NEW CONDO or TOWN HOME, you may be eligible for over $30,000 in HST Rebates!

  • If you bought a NEW HOUSE, you may be eligible for up to $24,000 in HST Rebates!

  • If you BUILT YOUR OWN HOUSE or DRAMATICALLY RENOVATED your old one, you may be eligible for over $16,000 in HST Rebates!

An Ontario new housing rebate may be available for some of the provincial part of the HST paid by an individual who purchases newly constructed or substantially renovated housing for use as the primary place of residence of the individual or a relation of the individual. The Ontario new housing rebate may also be available to an individual who constructs or substantially renovates their own home, or hires someone else to do so for them, for such use.

Topics for Ontario new housing rebate in this article

  1. Ontario new housing rebate for the purchase of new housing (building and land)
  2. Ontario new housing rebate for the purchase of a building and lease of land
  3. Ontario new housing rebate for owner-built housing
  4. Ontario new housing rebate for the purchase of a mobile or floating home
  5. To claim Ontario new housing rebate
  6. Ontario new housing rebate FAQ

An individual will be entitled to claim both an Ontario new housing rebate and a GST new housing rebate if all of the conditions for claiming each rebate are met. The conditions for claiming the Ontario new housing rebate will be the same as the conditions for claiming a GST new housing rebate, with the exception of the $450,000 or $472,500 (depending on the situation) maximum threshold amount.

The Ontario new housing rebate will be available for the same types of housing for which a GST new housing rebate is currently available.

The rebate is gradually reduced for homes valued from $350,000 to the maximum value of $450,000.

Ontario new housing rebate is available for any of the following:

  • building a home or contracting someone to build one
  • buying a newly constructed or substantially renovated home from a builder
  • buying a newly constructed house from a builder, where you lease the land from the builder under the same agreement to buy the house
  • substantially renovating a home or building a major addition to one
  • rebuilding a home destroyed by fire
  • buying a share of the capital stock in a newly constructed cooperative housing project

Application Form: To apply for this rebate, use Form RC7190-ON, GST190 Ontario Rebate Schedule.

Dates and Deadlines: Generally, applications must be received within two years from the date of possession.

1. Ontario new housing rebate for the purchase of new housing (building and land)

An individual will be entitled to claim both an Ontario new housing rebate and a GST new housing rebate if all of the conditions for claiming each rebate are met. (For more information, see Guide RC4028, GST/HST New Housing Rebate)

If the purchase price of newly constructed or substantially renovated housing is $450,000 or more, a GST new housing rebate will not be available. However, an Ontario new housing rebate will be available, regardless of the purchase price, as long as all of the other conditions for claiming the rebate are met.

The Ontario new housing rebate will be equal to 75% of the provincial part of the HST paid, up to a maximum Ontario rebate amount of $24,000.

For example, an individual purchased a new house, including the land, for $300,000 to use as the primary place of residence of the individual or a relation of the individual. The individual paid HST of $39,000 ($300,000 x 13%) and met all of the other conditions for claiming an Ontario new housing rebate and a GST new housing rebate.

The total amount of the new housing rebate to which the individual will be entitled will be calculated by adding the amount of the GST new housing rebate of $5,400 ($300,000 x 5% x 36%) for the federal part of the HST and the amount of the Ontario new housing rebate of $18,000 ($300,000 x 8% x 75%) for the provincial part of the HST. Therefore, the individual will be entitled to claim a total new housing rebate of $23,400 ($5,400 + $18,000).

To apply for this rebate, use Form RC7190-ON, GST190 Ontario Rebate Schedule.

2. Ontario new housing rebate the purchase of a building and lease of land

If the fair market value of the new housing (including the land) is $472,500 or more, a GST new housing rebate will not be available. However, an Ontario new housing rebate will be available (up to the $24,000 maximum, see below), regardless of the fair market value, as long as all of the other conditions for claiming the rebate are met.

For purchases of newly constructed or substantially renovated houses together with land leased from the builder, the Ontario new housing rebate will be equal to 5.31% of the price paid for the building portion of the house on the leased land, up to a maximum Ontario rebate amount of $24,000.

For more information on the purchase of housing from a builder where the related land is leased from the same builder, see Guide RC4028, GST/HST New Housing Rebate.

The Ontario new housing rebate will be administered in a manner similar to the GST new housing rebate. Builders will be able to pay or credit the Ontario new housing rebate to the individual purchaser of new housing, just as they currently may pay or credit the GST new housing rebate. If a builder did not pay or credit the rebate at the time of purchase, the individual will be able to file a rebate application for the Ontario new housing rebate with us directly.

To apply for this rebate, use Form RC7190-ON, GST190 Ontario Rebate Schedule.

3. Ontario new housing rebate for owner-built housing

An individual will be entitled to claim both an Ontario new housing rebate and a GST new housing rebate where all of the conditions for claiming each rebate are met. The conditions for claiming an Ontario new housing rebate will be the same as the conditions for claiming a GST new housing rebate with the exception of the $450,000 maximum threshold amount.

If the fair market value of the housing upon substantial completion of the construction or substantial renovation is $450,000 or more, a GST new housing rebate will not be available. However, an Ontario new housing rebate will be available (up to the applicable maximum of $24,000), regardless of the fair market value, as long as all of the other conditions for claiming the rebate are met.

For owner-built housing, the maximum Ontario new housing rebate amount will depend on whether the individual paid the provincial part of the HST on the purchase of the land upon which the individual constructed or substantially renovated the housing.

Where the individual paid the provincial part of the HST on the purchase of the land, the Ontario new housing rebate will be equal to 75% of the provincial part of the HST paid on the purchase of the land and eligible construction costs, up to a maximum Ontario rebate of $24,000. Where the individual did not pay the provincial part of the HST on the purchase of the land, the Ontario new housing rebate will be equal to 75% of the provincial part of the HST paid on eligible construction costs only, up to a maximum Ontario rebate of $16,080.

For example, an individual is constructing a house for his family on land he purchased in January 2009. The individual paid the GST on the purchase price of the land and on most of the construction materials used to construct the house. The construction of the house will be completed in September 2010, and the individual will likely pay the HST on some additional construction materials. The individual will be entitled to claim an Ontario new housing rebate for owner-built homes provided he meets the same conditions, other than the maximum threshold amount of $450,000, that are in place for claiming a GST new housing rebate. The Ontario new housing rebate will be equal to 75% of the provincial part of any HST the individual paid on eligible construction materials. Given that the provincial part of the HST was not paid when the land was purchased, the maximum Ontario rebate amount the individual could claim will be $16,080, regardless of the fair market value of the house when construction is completed.

The Ontario new housing rebate will be administered in a manner similar to the GST new housing rebate.

To apply for this rebate, use Form RC7190-ON, GST190 Ontario Rebate Schedule.

4. Ontario new housing rebate for the purchase of a mobile or floating home

An Ontario new housing rebate may be available for the provincial part of the HST paid by an individual who purchases a newly constructed or substantially renovated mobile home or floating home for use as the primary place of residence of the individual or a relation of the individual.

NOTE: Modular homes are considered to be mobile homes for GST/HST purposes provided they meet certain criteria including that the manufacture or assembly of the modular home is substantially completed prior to being moved to a site.

If the purchase price of the newly constructed or substantially renovated housing is $450,000 or more, a GST new housing rebate will not be available. However, the Ontario new housing rebate will be available (up to the applicable maximum, see below), regardless of the purchase price, as long as all of the other conditions for claiming the rebate are met.

An individual that meets all of the eligibility conditions for claiming an Ontario new housing rebate for the purchase of a mobile or floating home will be able to choose one of the two following options to claim their rebate.

NOTE: Depending on the particular circumstances, one of these options may be more beneficial than the other.

Option 1 – Ontario new housing rebate for owner-built homes

Under this option, the individual will be able to claim an Ontario new housing rebate equal to 75% of the provincial part of the HST paid to purchase the mobile or floating home, land, and other eligible goods and services up to a particular maximum rebate amount. Under this option, the maximum Ontario rebate available will depend on whether the individual paid the provincial part of the HST on the purchase of the land, such that the maximum Ontario rebate amount will be:

  • $16,080 if the individual did not pay the HST to purchase the land or an interest in it; or
  • $24,000 if the individual paid the HST to purchase the land or an interest in it.

Option 2 – Ontario new housing rebate for houses purchased from a builder

Under this option, the individual will be able to claim an Ontario new housing rebate equal to 75% of the provincial part of the HST paid on the purchase of the mobile or floating home, to a maximum Ontario rebate amount of $24,000. (This maximum will apply whether the individual paid the provincial part of the HST on the purchase of the land or not.)

The provincial part of the HST paid on other purchases related to the new home cannot generally be included in the rebate claim. However, if the individual bought both the land and the home from the builder or dealer under a single written agreement, the individual will be entitled to claim an Ontario new housing rebate for the purchase of both the home and the land under that single agreement, as long as all other conditions for claiming the rebate are met.

The Ontario new housing rebate will be administered in a manner similar to the GST new housing rebate. Under option 1, the individual will file the Ontario new housing rebate application with us directly, as is the case with the existing GST new housing rebate for owner-built housing. Under option 2, a builder will be able to pay or credit the Ontario new housing rebate to the individual purchaser of new housing, just as they currently may pay or credit the GST new housing rebate. If a builder did not pay or credit the rebate at the time of purchase, the individual will be able to file a rebate application for the Ontario new housing rebate with us directly.

To apply for this rebate, use Form RC7190-ON, GST190 Ontario Rebate Schedule.

To claim Ontario new housing rebate

The Ontario new housing rebate in respect of the provincial part of the HST would be administered by the CRA in a manner similar to the GST new housing rebate. Builders would be able to pay or credit the Ontario new housing rebate to the purchaser of a new house, just as they currently may pay or credit the GST new housing rebate. Individuals would also be able to file an application for the Ontario new housing rebate directly with the CRA if the builder does not pay or credit the rebate to the purchaser. A single rebate application for both the Ontario new housing rebate and the GST new housing rebate is available on the CRA Web site.

Individuals claiming the Ontario new housing rebate for owner-built housing would file an application directly with the CRA. A single rebate application for both the Ontario new housing rebate and the GST new housing rebate for owner-built housing is available on the CRA Web.

The time limits for claiming an Ontario new housing rebate are the same as those for claiming a GST new housing rebate.

Ontario new housing rebate FAQ

Q: If I am entitled to claim an Ontario new housing rebate, would I still be able to claim a new housing rebate for the federal part of the HST?

Provided that you meet all of the conditions for claiming the GST new housing rebate, you would be entitled to claim a rebate for the federal part of the HST.

For example, if you purchased a new house for $300,000 to use as your primary place of residence, you would pay the HST of $39,000. If you meet all of the other conditions for claiming the rebate, you would be entitled to claim a GST new housing rebate of $5,400 in respect of the federal part of the HST and an Ontario new housing rebate of $18,000 in respect of the provincial part of the HST.

If you purchased a house for $450,000 or more, you would not be entitled to claim a GST new housing rebate in respect of the federal part of the HST. However, if you meet all of the other conditions for claiming the rebate, you would be entitled to claim an Ontario new housing rebate in respect of the provincial part of the HST.

Q: If all of the conditions for claiming the rebate are met, how would the Ontario new housing rebate in respect of the provincial part of the HST be calculated?

Purchase of a house

For purchases of newly constructed or substantially renovated houses, the Ontario new housing rebate would be equal to 75% of the provincial part of the HST paid on the purchase, up to a maximum rebate amount of $24,000. There would be no phase out of this rebate, such that homes priced above $400,000 would qualify for the maximum rebate amount of $24,000. This rebate would essentially reduce the provincial part of the HST to a rate of 2% on the first $400,000 of the purchase price of the house.

Purchase of house together with lease of land

For purchases of newly constructed or substantially renovated houses together with land leased from the builder, the Ontario new housing rebate would be equal to 5.31% of the price paid for the building portion of a house on leased land, up to a maximum rebate amount of $24,000. There would be no phase out of this rebate. If the price paid for the building portion of a newly constructed or substantially renovated house is above $452,000, the house would qualify for the maximum rebate amount of $24,000.

Purchase of mobile or floating home

For purchases of newly constructed or substantially renovated mobile homes and floating homes, the Ontario new housing rebate would be equal to 75% of the provincial part of the HST paid, up to a maximum rebate amount of $24,000. There would be no phase out of this rebate, such that mobile and floating homes priced above $400,000 would qualify for the maximum rebate amount of $24,000.

Purchase of shares in a housing co-op

For newly constructed or substantially renovated houses in a cooperative housing complex acquired by purchasing qualifying shares in the cooperative housing corporation, the Ontario new housing rebate would be equal to 5.31% of the price paid for the qualifying share, up to a maximum rebate amount of $24,000. There would be no phase out of this rebate, such that a qualifying share priced above $452,000 would qualify for the maximum rebate amount of $24,000.

Owner-built housing

For owner-built housing, the maximum Ontario new housing rebate amount would depend on whether the individual paid the provincial part of the HST on the purchase of the land upon which the individual constructed or substantially renovated the housing.

  • Where the provincial part of the HST was paid on the land, the Ontario new housing rebate would be equal to 75% of the provincial part of the HST paid, up to a maximum rebate amount of $24,000. There would be no phase out of this rebate, such that owner-built homes with a fair market value above $400,000 would qualify for the maximum rebate amount of $24,000.
  • Where the provincial part of the HST was not paid on purchase of the land, the Ontario new housing rebate would be equal to 75% of the provincial part of the HST paid, up to a maximum rebate amount of $16,080.

The rebate for owner-built housing would be available for purchases of newly constructed or substantially renovated mobile or floating homes and for housing constructed or substantially renovated by an individual or a person hired by the individual to do so, for use as the primary place of residence of the individual or a relation of the individual.

Q: Assuming I would be entitled to claim the Ontario new housing rebate in respect of the provincial part of the HST, what would the rebate amount be where the purchase price of the house, not including the HST and any rebates, is: (a) $300,000? (b) $400,000? (c) $500,000?

The Ontario new housing rebate would be available in respect of the provincial part of the HST paid for the house, up to a maximum rebate amount of $24,000. The rebate would be available for houses in all price ranges provided that all of the conditions for claiming the rebate are met (e.g., a new house purchased in Ontario for use as the primary place of residence of the purchaser or a relation of the purchaser).

(a) $18,000 – Where the purchase price of the house, not including the HST and any rebates, is $300,000, the HST payable would be $39,000, composed of the federal part at 5% ($15,000) and the provincial part at 8% ($24,000). The Ontario new housing rebate in respect of the provincial part of the HST would be equal to $18,000 in this case (i.e., 75% of $24,000). Note that the GST new housing rebate would also be available in respect of the federal part of the HST paid on the purchase of the house. In this case, the GST new housing rebate would be equal to $5,400 (i.e., 36% of $15,000).

(b) $24,000 – Where the purchase price of the house, not including the HST and any rebates, is $400,000, the HST payable would be $52,000, composed of the federal part at 5% ($20,000) and the provincial part at 8% ($32,000). The Ontario new housing rebate for the provincial part of the HST would be equal to $24,000 in this case (i.e., 75% of $32,000). Note that the GST new housing rebate would also be available in respect of the federal part of the HST paid on the purchase of the house. In this case, the GST new housing rebate would be equal to $3,150 (i.e., $6,300 × [($450,000 – $400,000) ÷ $100,000]).

(c) $24,000 – Where the purchase price of the house, not including the HST and any rebates, is $500,000, the HST payable would be $65,000, composed of the federal part at 5% ($25,000) and the provincial part at 8% ($40,000). The Ontario new housing rebate for the provincial part of the HST would be equal to $24,000 in this case (i.e., 75% of $40,000, to a maximum rebate amount of $24,000). There is no GST new housing rebate in respect of the federal part of the HST paid on the purchase of a house where the purchase price is $450,000 or more.

Q: I am constructing a house for my family on land that I purchased in January 2009. I paid GST on the purchase price of the land. I have paid GST on the construction materials used to date to construct the house. The construction of the house will be completed in September 2010 and I will likely pay the HST on some additional construction materials. Would I be entitled to claim an Ontario new housing rebate?

Yes, you would be entitled to claim an Ontario new housing rebate for owner-built homes provided that you meet the same conditions, other than the maximum threshold amount of $450,000, that are in place for claiming the GST new housing rebate. The Ontario new housing rebate would be equal to 75% of the provincial part of any HST paid on your construction materials. Given that you have not paid the provincial part of the HST when you purchased the land, the maximum rebate amount that you would be entitled to claim is $16,080, regardless of the fair market value of your house when you complete the construction. You would also be entitled to claim a GST new housing rebate for the GST paid on the purchase of the land and construction materials and the federal part of the HST paid on the additional construction materials provided that the fair market value of the house does not exceed $450,000.

Forms and guides on Ontario New Housing Rebate

  • Guide RC4028, GST/HST New Housing Rebate
  • GST/HST Info Sheet GI-079, Harmonized Sales Tax: Ontario New Housing Rebate
  • GST/HST Info Sheet GI-085, Harmonized Sales Tax: Stated Price Net of GST/HST New Housing Rebates in Ontario
  • GST/HST Info Sheet GI-088, Harmonized Sales Tax: Stated Price Net of GST/HST New Housing Rebates and the Ontario RST Transitional New Housing Rebate
  • Form RC7190-ON, GST190 Ontario Rebate Schedule
  • GST/HST NOTICE244, Harmonized Sales Tax for Ontario – Questions and Answers on Housing Rebates and Transitional Rules for Housing and Other Real Property Situated in Ontario
References:
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/cnstrctn/by-eng.html
http://www.cra-arc.gc.ca/E/pub/gp/rc4028/
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/cnstrctn/nwhsng/ntr/menu-eng.html
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