HST New Home Rebate
When you buy a new house or condominium in Ontario, you are required to pay 13% Harmonized Sales Tax (“HST”) made up of 8% PST + 5% GST which is typically included in the Developer's list price.
An eligible new home buyer can claim a rebate of the PST & GST, calculated as follows:
75% of PST up to a maximum of $24,000 (reached at $424,850)
36% of GST if the price is <$350k up to a maximum of $6,300. Between $350k-$450k, a reduced sliding scale applies and above $450k, the rebate is $0.
If you buy the property as your principal residence, the New Home Rebate is typically assigned to the Developer who automatically credits the buyer with the rebate amount so that you don’t pay anything out of pocket. However if you are an investor, you have to pay the rebate amount upfront - but don't worry, if you rent out the property for at least 1 year, you will be eligible to get the entire rebate amount back and it becomes a cash-flow item only, not a true cost.