No HST is payable on the purchase price of a resale home.
According to CRA a resale home is defined as, "The sale of housing that has been previously occupied by an individual as a place of residence and that is exempt from GST would also be exempt for purposes of the HST."
HST at 13% is payable on the purchase of a new home or a substantially renovated home with rebates available from both the Provincial and Federal portions.
Qualifying housing would include newly constructed and substantially renovated housing, co-operative housing, owner-built housing, mobile homes, floating homes and housing on leased land.
- Provincial Rebate Portion: You are entitled to claim up to a maximum rebate of $24,000 for the Provincial portion of the HST, provided the home is a primary place of residence of the buyer or the buyer's relation. That's equal to 75% of the Provincial portion to the $24,000 maximum.
This rebate reduces the provincial part of the HST to a rate of 2% on the first $400,000 of the purchase price. Homes above $400,000 continue to qualify for the maximum $24,000 rebate.
- Federal Rebate Portion: You are also be entitled to claim a rebate for the Federal portion of the HST on meeting the conditions for the GST new housing rebate.
Homes priced at $450,000 or more do not qualify for the GST (Federal portion) new housing rebate.
The GST new housing rebate is equal to 36% of total GST paid on new home prices up to $350,000.
$300,000 x 5% GST = $15,000 x 36% = $5,400 rebate
$350,000 x 5% GST = $17,500 x 36% = $6,300 rebate ($6,300 is the maximum GST rebate)
For prices between $350,000 and $450,000, the rebate is calculated on a sliding scale.
Calculation: [($450,000 - New Home Price) ÷ $100,000] x $6,300 = GST Rebate
Price of new home is $400,000
[($450,000 - $400,000) ÷ $100,000] x $6,300 = $3,150 GST Rebate
No GST rebate applies to homes above $450,000.
This article is intended for information purposes only. Please consult with your tax advisor for you specific situation. Also, for a more in depth explanation please refer to Questions and Answers to Housing Rebates in Ontario, CRA Notice 244.