How To Qualify For The HST Rebate

Are you looking to purchase a brand new or renovated house? If so, you may be eligible for the HST New Housing Rebate in Ontario, which is also called the New Home Rebate. To be eligible for it, one must meet a few criteria.

Sometimes, you may not be eligible for it. Your denied HST rebate will be notified to you in the form of a Notice of Assessment. To help you deal with the HST rebate, you can find more here.

There are two reasons for HST rebate denial: You do not qualify for the rebate or submit the proper paperwork. We’ve put together a quick guide to the GST/HST New Housing Rebate in Ontario and a few reasons for your rebate application denial.

To be eligible for the federal and provincial portion of the HST rebate in Ontario, you have to have:

  • Purchased a newly constructed house or condo from the builder
  • Contracted a builder to build a house
  • Built home and hired a professional to complete construction
  • Renovated your home or condo
  • Rebuilt a home that was destroyed by fire
  • Purchased shares in a new cooperative housing project
  • Added a major addition to your home
  • Converted a non-residential property into a home

What does the law say about the HST rebate?

According to the HST New Housing Rebate, a buyer or member of their immediate family must reside in a new or renovated property. Member must be related by marriage, blood, common-law partnership, adoption, or being a parent, child, or spouse, as defined by the income tax act. The Canada Revenue Agency (CRA) uses specific criteria to determine if a residential property is a person’s primary residence.

The factors include:

  • Duration of ownership and residency of the unit by the buyer or related family member.
  • If the person considers the property as the primary residence.
  • If the address is used for public records such as driver’s license in Canada.

Reasons why the CRA denies a rebate application:

  • Incomplete application

An incomplete application may not seem like a big deal, but it can cost you both time and money. That’s why it’s safer to seek professional help from the onset of a rebate application. They will help determine if your home falls under the legal criteria for a rebate application.

  • Incorrect rebate calculation

A tax expert will ensure that all your paperwork for the HST rebate is correct to the T the first time. Apart from ensuring your peace of mind, you don’t have to worry about why your application was rejected. Tax experts will explain everything in detail and give you an accurate value of the expected rebate.

  • Exceeding the deadline

If you are building or renovating your home in Toronto, you have a duration of two years to file your claim credit. Your application will be denied if it exceeds this deadline.

  • Unqualified for the federal or provincial portion

The CRA will reject your application if it does not fulfill its conditions under the income tax act.

  • Lack of supporting documents

You must submit all relevant paperwork to the CRA regardless of whether your home is new or substantially renovated. The forms include RC7191, GST191, and GST191 WS.