Are you unsure if you or your clients qualify for the HST rebate on a new home or condo?
Whether you are flipping your new property or renting it out, be sure to check the HST rules that relate to the federal 5 percent portion and provincial 8 percent portion of the HST. In the article “Why CRA wants $30,000 HST rebates back” written by Mark Weisleder, a real estate lawyer, he explains that in order to qualify for the HST rebate, the new property has to be your primary residence, or you must prove that the property will be leased for at least one year. If one of these two conditions is met, you may be eligible for a rebate of up to 36 percent on the federal portion of the HST if the home costs under $450,000, and a rebate of up to 75 percent on the provincial portion to a maximum of $24,000.
If the investment property is sold within the year, you will not qualify for the rebate and must pay the tax. In the last decade, many investors who purchased investment properties have attempted to receive this HST rebate by signing agreements with the builder stating that they would move in, since it is the builders that applied for the HST rebates on their behalf. When CRA found that the investors did not meet one of the two criteria for the rebate, CRA sent demand letters requesting the HST rebate be returned with interest.
[See full article published on Moneyville.ca on April 27, 2012: Click Here]
Sutton Group Admiral Realty Inc., Brokerage 