Many investors are not aware of the complexities that apply to purchasing a newly constructed property for rent. It often comes as a complete surprise that they have to pay HST on the purchase. That can easily add up to $24,000 to the purchase cost and cause cash flow issues.

Some are not aware that there is an HST/GST housing rebate available to them. The HST housing rebate is available to home owners who have purchased a home from the builder or custom-built their own homes.

In order to qualify for the Federal rebate, the total purchase price of the home must be less than $450,000 otherwise the federal portion of HST is restricted/not available for recovery.

To be eligible for the GST/HST new residential rental property (NRRP) rebate one of the following conditions must be present:

• You are a landlord who purchased a newly constructed or substantially renovated residential rental property
• You are a landlord who built your own residential rental property
• You are a landlord who made an addition to a multiple-unit residential rental complex
• You are a builder who had to account for the GST/HST under the self-supply rules because you sold a residential unit to an individual and leased the related land to that individual under a single written agreement (available only if the individual is eligible to claim the new housing rebate)
• You are a person who had to account for the GST/HST under the self-supply or change-in-use rules because you made an exempt lease of land used for residential purposes (such as the rental of a residential lot or a site in a residential trailer park)

We are here to help you navigate the maze of HST rebate recovery. Set up a consultation with our experienced tax advisor and we will be happy to help!