You are in the market to buy a home and are not sure how the HST impacts your situation. Or even if you are a home owner, at some point when you sell, you will hopefully buy. Either way, the following may help you understand how the taxes will apply to your situation. Please note that the following is for general information only. For complete details, please visit www.cra-arc.gc.ca
The HST does not apply to resale homes
Sales tax did not apply to the purchase price of resale homes under the previous PST, and it does not apply under the HST. In fact, about 93 per cent of all homes sold in Ontario, on average, are not subject to an additional tax amount under the HST.
For new housing, compared to the retail sales tax that was previously embedded in new home prices, additional tax generally applies only to the portion of the price above $400,000.
Enhanced New Housing Rebate
Buyers of new homes purchased as primary residences receive a rebate of up to $24,000, regardless of the price of the new home. This rebate ensures that buyers of homes priced up to $400,000 (about three-quarters of new homes built in Ontario), on average, pay no more - or possibly even less - tax than under the old PST system, where PST was embedded in new home prices.
New Rental Housing Rebate
New rental housing, including residential investment properties, receive a similar rebate. This rebate supports affordable rental housing in Ontario.
Building your own home - Ontario new housing rebate
An individual who builds or substantially renovates, or hires someone else to build or substantially renovate, their own house may be entitled to claim an Ontario new housing rebate in respect of the provincial part of the HST paid by the individual to build or substantially renovate their house.
The rebate would be available if the individual:
- is entitled to claim a GST/HST new housing rebate in respect of the federal part of the HST; or
- would be entitled to claim a GST/HST new housing rebate for the federal part of the HST if the fair market value of the housing at the time of substantial completion were less than $450,000.