How would you like the purchase of your new home to translate into clawing back some of your hard-earned dollars – and from the government? Very much, I think. How is this possible? It is called the GST rebate.
The GST rebate is a federal program that provides a rebate for GST paid on newly-built or substantially renovated homes (including condos). This rebate was formerly only available if you (or someone you are related to) were going to live in the house. However, now the rules have been changed and the scope has been widened. So if you have begged, borrowed and saved your way to purchasing a rental property – hats off to ya – you also qualify for the GST rebate. Obviously, there are caveats here, in particular, you (the purchaser) and the property both need to qualify and, of course, there are restrictions – nonetheless, still good news for the HomeBuyer. Typically, your lawyer will help you prepare these forms, however should you require them, they are available on the Canada Revenue Agency website.
Also, if you purchased a newly-built or substantially renovated home during the period of time that the GST was reduced from 7% to 6%, you may qualify for the ‘Transitional Rebate for Purchasers of New Housing’. You may not have known that the benefit of the lower tax rate was available to you – now you do! In certain cases, this rebate gives the benefit of the new tax rate to purchasers of newly-built or substantially renovated who signed the purchase and sale agreement before May 3, 2006 but took possession and ownership after June 30, 2006. Your real estate lawyer may have already contacted you about this rebate if you fall within this transitional period. If not, you can fill out your own application right now. I have included the link for the Canada Revenue Agency below – good luck!
Rachel Loizos is an associate lawyer at Sotos LLP in Toronto. She practices in the area of real estate law.