Harmonized Sales Tax on Real Estate - Falcone Law
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Harmonized Sales Tax on Real Estate


Harmonized Sales Tax on Real Estate

You are generally exempt from paying HST on real estate if the property you are purchasing is BOTH:

1. Residential


2. Residential

If you are buying new or substantially renovated residential property from a builder, then HST is payable on the transaction (although at a reduced rate after accounting for rebates that the government has put in place).  Most new home builders apply for the rebate on your behalf and build the rebate into the final price, assuming that all of their purchasers qualify for the rebate.

However, if you are buying the property for investment purposes (i.e. to rent it out) you do not qualify for the automatic rebate that the builder applies for, meaning the builder will add that cost back to the purchase price. You will then have to personally file a claim with the government pursuant to the HST New Residential Rental Property Rebate (if you qualify) in order to get the rebate paid back to you directly. Unfortunately, you cannot apply until after closing, so you will have to come up with the full HST amount up front and wait for your reimbursement from the government.