The HST rebate program was only recently implemented by the Canadian government, but ever since that day, numerous people have taken advantage of it and recovered some of the money they invested in the purchase of their first home or the renovation of their existing house. If you are interested in applying for this program, you should first consider getting some professional advice from specialists in this domain and one very good place to find advice is rebate4u.ca. Here are the ins and outs of this tax rebate program.
People entitled to apply to the tax rebate
One of the reasons why this program was introduced is that it was meant to help and encourage families buy their first home and not necessarily to help corporations or investors who are only looking for making quick profit out of new condo or home purchases. This is the reason why the one applying for this program has to follow some strict rules and to match certain criteria.
- First of all, the one purchasing a house or a condo must be an individual and not a company or a corporation, because as it was already mentioned, this program was intended to help individuals only.
- Secondly, the purchaser is obliged to pay the HST to the builder of the house the moment the house is purchased.
- Thirdly, it is mandatory that the one purchasing the house or the condo to be the first one that occupies the building and that it is used as his or her primary residence.
It is worth mentioning that a similar program is available for those who renovate their houses and another type of program for those who intend to buy a new house and then rent it out to someone else immediately, for a period of at least one year. However, there are different rules and conditions that apply to these situations, which is why it is best to discuss about these aspects to someone who is specialized in this domain in order to get proper advice.
How the tax rebate is calculated
It is worth mentioning from the very beginning that there are different rules that apply when calculating the HST rebate, depending on whether it is federal portion or provincial portion. For instance, as far as the amount of the provincial tax portion is concerned, it depends on the purchase price you have to pay for the property you are interested in buying. If the price is less or equal to $400,000, then the rebate is going to be of nearly 75% of the provincial tax you have to pay, which means that you can recover more than $20,000. On the other hand, the federal tax portion is available in the case of purchasing houses or condos which price does not exceed $350,000, not to mention that the amount of money you can recoup in this situation is significantly lower.
As it can be seen, these are the ins and outs of the HST rebate program you should know about before actually applying for it.