If a property is new construction (as opposed to resale), HST on the property must be paid to the CRA at the time of title transfer and final closing.
If you are purchasing a new build preconstruction condo or house from a builder AND it's going to be your primary residence, part of the HST is built into the purchase price and part of the HST will be paid by the builder upon closing. The builder will ask you to sign over the right for them to reclaim that portion of the new housing rebate from the CRA (the portion due at the time of closing). In this case, as a primary residence, there is essentially no additional HST that needs to be paid by the purchaser at the time of closing. The builder assumes the responsibility to pay it AND to reclaim it.
If the property is a preconstruction investment property, then the purchaser will be responsible for paying the portion of HST due upon closing through their solicitor at the time of title transfer (referred to as the final closing date). However, if certain conditions are met, such as having a 1 year lease in place, the purchaser can file for the Ontario HST New Housing Rebate and the Federal rebate to recover the portion of HST that was paid upon closing (up to $24,000 - $27,000, depending on the purchase price of the new construction investment). This filing must be made under the HST New Residential Rental Property Rebate program.
HST Relief: Rebates & Loans will verify the rebate that you are entitled and file with the CRA. We also consult our clients on what to expect in terms of closing costs and HST due on final closing and we provide loans for the HST in the form of bridge financing until the rebate is recovered from the CRA. The amount you will have to pay depends on your purchase price, as does the rebate amount.
Give us a call if you have additional or more specific questions: 1-866-832-1990