Understanding the HST in the puchase of new condo

Edited by Admin
Hello,
 
I am posting here because I am new to the real estate investing world and have some questions.  I am considering a preconstruction condo in downtown Toronto, but I do not fully understand the HST that will be added or included in the condo price.  Here are my major questions and concerns:
 
 - How will I know if the HST is included in the price that a developer lists for a particular preconstruction condo?
  - What I hear is that the amount of HST you will owe is different based on whether you are the resident or end-user of the condo versus being an investor.
- How does the HST Rebate work and who qualifies?
 
Thanks all for the insight on how HST works.  I'm eager to invest as soon as I sort these issues out.

Answers

By HST Relief
How HST and the HST Rebate work for preconstruction condos is split into 2 scenarios in Ontario:
 
1. If you buy the preconstruction property and will use it as a primary residence, the builder credits the purchaser the rebate upon closing.  The Purchase Agreement has an assignment that will assign over the ability to reclaim the HST New Housing Rebate to the builder, making the HST due on closing a wash or net even.  The builder pays for it and claims your rebate to get their money back.
 
2.  If yu purchased a brand new condo and will be using it as a rental property and do not move in yourself, then you will be responsible to pay the potion of HST due on closing.  For a 300,000 dollar condo, this is in the neighbourhood of 22,000 dollars (a portion of the HST, the Rebate portion, as some of the HST is already built into the purchase price).  For this scenario, HST Relief: Rebates & Loans can recover the portion of HST you paid on closing through the New Residential Rental Property Rebate program.  Please give us a call at 1.866.832.1990.
 
 

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