When buying a property to use as an investment, you will have to pay Harmonized Sales Tax (HST) on the purchase value. Fewer buyers know that newly built investment properties are eligible for a substantial tax rebate from the federal government by submitting GST191-WS form. It is important to carefully research the new rental property rebate requirements before buying the house as an investment.
There Are Some Requirements For The Rebate For New Residential Rentals:
Initially, consider the property a newly built home acquired through a major renovation or conversion project, including a substantial work purchase.
The house must be first leased out for a year. All the tenants should be individuals, and they should use the home for residential commitments.
The third requirement is that you need to pay GST/HST when you bought the property. It is considered that you have self-supplied and paid and gathered tax if you build or remodel a home.
You must provide the CRA with your lease contract and your completed rebate application.
Types Of Rebates And Their Rates:
Rebates are available for both owner-built and builder built homes. Rates vary depending on the rebate applied.
Our calculator makes it possible to calculate the rebate for housing bought from builders. This rebate applies to the vast majority of homebuyers. Each rate calculates the GST or federal portion of the HST rebate at a different rate for different situations.
- You purchased the property and the land it is situated on. You bought the property and leased it.
- By purchasing a share in the company, you purchased an investment in cooperative housing.
The calculator provides estimates and rates for the first scenario, which is the most common one.
The GST/HST Housing Rebate For New Homes And How To Apply:
You must submit two forms to be eligible for the rebate. One that calculates your GST rebate and one that is an application form. You must submit the forms to the listed tax centres on the government’s site.
While you are not required to provide supporting documentation, you might be asked to produce evidence of occupancy or invoices. After submitting your application, you will receive your money in six months. Remember that the deadline to apply is usually two years after the base date on the forms. You will find more here about all the GST/HST rebates and updates.
What Happens If I Am Planning Of Building My Own House?:
For owner-built homes, you must have built your home on land you own or leased previously. To qualify, you will need to show that above 90% of the house’s interior was removed or rebuilt.
Saving money with a traditional HST rebate is simple because the property seller handles all the paperwork and submits the application. The New Residential Rental Property Rebate is a different story. You are responsible for completing the application. Like other rebate programs, certain rules, restrictions, and deadlines need to be followed. Landlords must also realize that renting out needs an entire year of occupancy to receive the rebate.