There is plenty of excitement, and confusion, around the Enhanced HST rebate when you are buying a new home or condominium from a builder. Here are five important points to remember.
What are the rules for eligibility?
To be eligible for up to $130,000 in the HST rebate, your agreement with the builder must be signed between April 1, 2026 and March 31, 2027. Agreements signed three years ago that are now ready to close are unfortunately not eligible. Construction must start no later than December 31, 2028. If you are buying to invest, the unit must be completed by December 31, 2029. If you are buying to live in it yourself, the unit must be completed by December 31, 2031.
Ask for a math worksheet at the sales office
It is very confusing when your sale price says HST included or HST excluded, and then there are very puzzling schedules attached to your agreement. Your builder should give you a simple math statement, saying this is the amount, including HST, that you will pay at closing, less any deposits you pay before closing.
Is it guaranteed you will receive the full HST rebate on closing?
If you are moving into the home as your primary residence on closing, you will receive the full HST rebate on closing and just transfer it to the builder. If you are buying as an investment, then you must pay the extra HST, 13% of the sale price up to $130,000, at the final closing. You can then apply for reimbursement after the closing. Note that you must have these funds available, as you cannot get a mortgage for this amount. It will take about four months to get the money back once you apply.
Can builders still refuse the HST rebate when I say I am moving in on closing?
In the past, some buyers have lied about moving in and then either sold or rented the unit after closing, resulting in the CRA going after the builder to return the HST rebate. In one situation, the builder saw that a buyer had advertised on a website that their condominium was for lease. The builder refused the rebate. Make sure you have proof you are moving in, with movers, utilities set up, Amazon deliveries and changing your driver’s licence. In addition, if the home is not ready before the deadlines of December 31, 2029, or December 31, 2031, the rebate could be denied.
Make sure a lawyer reviews your agreement
As you can see, there are many issues you will need to understand before committing to this purchase. Please ensure you review it with a lawyer so you understand your obligations right away and prepare any additional clauses to protect you.
If you have any questions related to the enhanced HST rebate, do not hesitate to contact me.
Mark Weisleder is a Partner, author and speaker at the law firm RealEstateLawyers.ca LLP. Contact him at [email protected] or toll-free at 1-888-876-5529.