5 Important Things to Know
About HST Rebates When Buying a New Home
1. All new homes are subject to HST in Ontario.
2. Does the Price Include HST Net of Rebates?
In most new home purchases, the Builder will include the HST in the purchase price net of applicable HST rebates. In this respect the builder has credited the qualifying rebates to the buyer by way of a reduction in the transaction price.
The builder will therefore want the buyer to agree that the builder is entitled to and can apply for the rebates.
Though rare, if the HST is in addition to the purchase price, then the buyer will be entitled to and can apply for the rebates.
3. For the HST rebates to apply, the Buyer must qualify and must for this reason declare that:
- He/she is buying the property to use as a primary residence.
- The buyer will be the first individual to occupy the property as a primary residence.
The property can also be the primary residence of someone related to the buyer or of a Buyer’s former spouse (See NOTE below*).
4. The Buyer will also have to certify that he/she qualifies for the new housing rebates and agrees to indemnify the Seller from all claims in the event that the Buyer fails to qualify, and this indemnity applies indefinitely and beyond the closing of the transaction. In other words, if discovered that the Buyer is not eligible or the Seller is unable to obtain the rebates, the Buyer shall then be required to pay to the Seller a sum equal to the rebate amount.
5. The Buyer agrees that the Seller is entitled to the rebates and agrees to execute any assignments or other documents required by the Seller to apply for and receive the rebates.
*NOTE: A relation “means an individual related to you by blood, marriage, common-law partnership, or adoption within the meaning of the Income Tax Act. ‘Blood relation’ is limited to parents, children, or other descendants or siblings. ‘Marriage relation’ includes your spouse or a person who is connected to your spouse by blood or adoption. A relation includes a common-law partner, a former spouse or a former common-law partner.”