August 26th 2021
The New House Rebate: What You Need to Know
On March 12th, 2021, the Canadian Revenue Agency made changes to its long-standing information on HST/GST new housing rebates. Buying your first home can be a daunting undertaking, and with so many things to consider, you might be spending more than you need to or not even know what to look for. First-time homebuyers especially struggle with navigating the waters of the housing markets and resources. Luckily, a lot of the changes the CRA made to their policies make it easier to find resources. This article will help you navigate the new housing rebate and what it means for your new house.
What is the HST/GST New Housing Rebate?
The CRA's HST/GST new housing rebate allows Canadian homeowners to recuperate a portion of the GST or the federal part of the HST paid if their house is newly constructed or significantly renovated. This means you can get some of the money back you spent on GST/HST when purchasing your house. The maximum amount you can receive is $450,000 in Ontario. The only catch is you have to apply for the refund, so you aren't necessarily entitled to get any money back, and the amount you do receive back might not be as high as the $450,000 maximum.
Another thing to consider is that the rebate is only available to individuals, so if you co-own a house with a partner or a friend, only one of you is entitled to receive the refund.
The good news is what qualifies as a new house is very generous. As long as it has been newly built or renovated, condos, duplexes, modular homes, mobile homes, and even floating boathouses can be used to apply for the new housing rebate. The HST/GST new housing rebate is a valuable tool for first-time homebuyers who have constructed their own homes or purchased them from a builder who has recently finished construction.
There are many facets to this rebate policy, and they vary in an unbelievable amount of ways. Each province is different for what you can and can't get from the rebate and what and who qualifies, so please be sure to do your research here. Knowing what types of rebates you can get can help plan for buying your first home and maybe allow for a bigger budget than you originally intended. What the CRA has changed recently for the new house rebate will only make it easier for new homeowners to access more of their money.
The changes that the CRA has made to the new housing rebate are not too substantial. Still, they will give new homeowners more resources to understand the housing market and their needs better. For the updates that started March 12th, 2021, the CRA has taken more action to offer online services to new homeowners. Online services for claiming your new housing rebate have improved, so you can now file applications from the CRA web portal. By accessing your account, you can file the GST191 file or, as you will come to know it, the New Housing Rebate Application for Owner-Built Houses.
This form allows individuals who constructed or majorly renovated their homes to claim the rebate. However, individuals with a fair market value (FMV) for their houses of $450,000 or more do not qualify to receive funds from the GST/HST new housing rebate. There are some exceptions to this, such as if you live in Ontario, you are still eligible to claim the Ontario new housing rebate for the provincial part of the HST you paid to build or renovate your new home. If you currently live in a different province, please see the province-specific information on your province's website.
Individuals are not the only ones to benefit from the new online updates. The CRA is now offering businesses a whole new way to stay informed about their claims through online email notifications. Online services for businesses have been upgraded, and it is now much easier to file business taxes online for your own business or a client.
The CRA has now introduced the GST/HST NETFILE, which allows people who register to file their goods and service tax or harmonized sales tax via the internet. This means business owners can file their taxes anywhere and even sign up for programs like the new housing rebate from their My Business Account portal. These returns and rebates are then directly transferred to the CRA over the internet, keeping the entire transaction online.
When businesses register for the GST/HST NETFILE, they can receive email notifications to view statements, notices, and important updates from the CRA. This allows companies to more easily submit tax reports and enroll in tax rebates, potentially freeing up time and money.
What You Need to Know
The changes to the GST/HST new housing rebate are moving into the future of online interactions. With helpful online guides to help you, filing for rebates and housing taxes has never been easier, which is excellent news for Canadian homeowners. However, as I am sure you have noticed by now, things are still far from simple. There are many different exceptions and inconsistencies within the application process, so navigating the best deal for you can be difficult. That is why you need to know you have a lot of resources that can help you get the best rebate for your new home.
At Properly, agents are up to date on all the latest information on housing tax rebates, making them an essential ally for looking to get the most from your rebate. Properly is just one of the many ways to get extra help and make a plan of action when buying or constructing a new home. Taking time to speak with an expert can give you a new perspective on what is available and offer you a chance to reevaluate your housing situation to get more from spending less.