New Homes

You may or may not be aware that when you buy a new home or new units you will be charged H.S.T on the price of that property. Good news is that you could be entitled to an H.S.T.  rebate.   Many folks however do not read or understand the rulings on this rebate. It is only available on closing and you must occupy the home or unit as your primary residence on the closing date.

Many investors buy solely for that purpose and some do not realize that the builder will increase the Agreement of Purchase and Sale to cover the amount of the H.S.T. that they would lose otherwise when that investor fails to occupy the home or unit.

If an investor wants to take advantage of the rebate all is not lost however as he must apply for it after closing but must be accompanied by a one year lease. The Investor Rebate can be obtained fairly speedily with an average of about two months wait. The investor should be ready with the increased price for closing in case of any delay.

The H.S.T. rebate could however be lost altogether if a third-party that is not a close relative is added to the title for financing purposes. Those considered close relative according to the Income Tax Act are mother, father, sister, child and grandchild and they must occupy the unit as their primary residence to be eligible for the rebate. Even if only 1% was assigned to a long lost rich uncle, the buyer would not be entitled to any rebate as per Canada Revenue Agency.

Knowing whether you will occupy the new property and who will be named on the title is extremely important information that needs to be shared with your Realtor when looking to buy a new home, condo or investment property if you want to be eligible for the H.S.T. rebate.

Advertisements

Comments are closed.