When tax season rolls around, most of us look for the usual rebates – maybe the use of a home office or gas in a work vehicle, but did you know that you can also use a new home to collect a significant tax rebate? The GST/HST New Housing Rebate is a great resource for those who meet the requirements – and can really help that refund cheque grow. Not many are aware of this rebate, and it could mean cash in your pocket.
Tax season may be behind us, but that doesn’t mean you have lost your opportunity to take advantage of the New Housing Rebate
What is the New Housing Rebate? This program is available to those who have purchased a new home or renovated an existing home extensively and it will allow you to recover some of the goods and services tax (GST) or the federal part of the harmonized sales tax (HST) paid for a new or substantially renovated house. It needs to be your primary place of residence. It is also available if you bought a new mobile, modular or floating home. Also, if you bought a share in a co-operative housing corporation or if your home was destroyed by a fire and rebuilt, these may be covered as well. This rebate will help you with the federal portion of the GST/HST you will have to pay.
Under the rebate, new home buyers can apply for a 36% rebate of the federal portion of HST applicable to the purchase price to a maximum of $6,300 for homes costing $350,000 or less. For new homes priced between $350,000 and $450,000, the rebate on the federal portion of the HST rebate would be reduced proportionately. New home buyers can apply for a 75% rebate of the provincial portion of the HST applicable to the purchase price to a maximum of $24,000.
Unfortunately, or fortunately, whichever way you choose to look at it, the purchase price of resale homes are exempt from the HST. This means that they can’t be claimed under this rebate.
How do you take advantage? It isn’t as simple as just stating you’ve purchased a new home or done some renovations. You need to apply for the federal rebate by using Form GST524. This involves filling out information about the property and the costs associated with the build/renovation.
To access these forms, and to find out more about what is required, please visit the CRA website: http://www.cra-arc.gc.ca/E/pub/gp/rc4028/README.html.
At Tax Solutions Canada, we can help you get your taxes sorted. Have a tax debt? Call us today at 1-888-868-1400.