Buying a new home in Canada is an exciting milestone! But you may be eligible for rebates and tax savings.
Understanding HST/GST rebate Canada programs can help you save thousands of dollars. These savings can make your dream home more affordable.
In this guide, we will learn about HST/GST Rebate Canada and the new home tax rebate, which could help you save money when buying a new home.
What Are Rebates and Tax Savings for New Homes?
When buying a new home, you must pay GST (Goods and Services Tax) and HST (Harmonized Sales Tax). However, the government offers rebates to help homebuyers lower their costs.
These rebates apply to:
- Brand-new homes bought from a builder.
- Pre-construction homes that are still being built.
- Substantially renovated homes that meet eligibility criteria.
Understanding the HST/GST Rebate Canada
The Government of Canada offers a Canada home buyers rebate to reduce the GST/HST paid on a new home. This is called the GST/HST New Housing Rebate.
Who Can Apply?
- To qualify for the HST rebate for new homes, you must:
- Buy a new or substantially renovated home.
- Use the home as your primary residence.
- Be the first occupant of the home.
- Meet the rebate eligibility for new home conditions.
How Much Amount Can You Get?
- If your new home costs $350,000 or less, you may get a full rebate on the 5% federal GST.
- You may qualify for a partial refund if your home costs between $350,000 and $450,000.
- Homes above $450,000 do not qualify for the GST rebate for first-time buyers.
Provincial Rebates: Extra Savings for Home Buyers
In addition to the federal rebate, some provinces offer HST exemptions and tax refunds for new homes.
Ontario New Home Rebate
In Ontario, buyers can apply for the Ontario HST Rebate. This covers up to 36% of the Ontario portion of HST, to a maximum of $24,000.
BC New Housing Rebate
In British Columbia, the BC New Housing Rebate allows homebuyers to recover 36% of the 5% GST if the home price is $350,000 or less.
Pro Tip: Every province has different rules, so check your local rebate application process.
Other Tax Savings and Credits for New Home Buyers
Besides rebates, there are other ways to save money when buying a home.
1. Home Buyer Tax Credit (HBTC)
First-time homebuyers can claim the home buyer tax credit (HBTC) on their income taxes, which can result in a tax refund of up to $750.
2. Property Tax Rebate
Some cities offer property tax rebates or reductions for new homeowners. Check with your local municipality.
3. First-Time Home Buyer Incentive
This is a shared equity program where the government helps reduce your mortgage payments.
How Can I Apply for the HST/GST Rebate?
Applying for a GST refund for new homes is simple:
- Complete the rebate application form. You can find it on the Canada Revenue Agency (CRA) website.
- Provide proof of purchase. This includes the purchase agreement and builder invoices.
- Apply to the CRA and wait for approval.
- Receive your rebate! If approved, you’ll get a cheque or direct deposit.
Pro Tip: Many homebuyers hire professionals to help with the rebate application process to ensure they get the maximum refund.
Common Questions About New Home Rebates
1. Do First-Time Buyers Get Extra Rebates?
Yes! GST rebates for first-time buyers may be available through the Home Buyer’s Plan (HBP) and First-Time Home Buyer Incentive.
2. Can I Apply for a Rebate if I Buy a Pre-Construction Home?
Yes! The new home purchase tax savings apply to pre-construction homes as long as you are the first occupant.
3. How Long Does It Take to Get the Rebate?
The CRA usually takes 4-6 months to process your rebate claim.
Final Thoughts
Buying a home is expensive, but rebates and tax credits can help! Understanding the HST/GST rebate Canada programs can save you thousands of dollars. Be sure to:
- Check if you qualify for a new home tax rebate.
- Apply for all home buyer tax credits available to you.
- Work with a professional to navigate the rebate application process.
Connect with the Best Brokerage in Canada for expert advice on buying a home. Also, check out a timeline of the entire process to learn what happens next!
