Thinking of Purchasing an Investment Property? The GST/HST New Residential Rental Property Rebate

If you have purchased a newly built home or condo with the intention of using it as an investment property, you may be eligible for the New Residential Rental Property Rebate (“Rebate”).

Unlike the New Housing Rebate, however, the NRRP Rebate cannot be assigned to the builder. Consequently, the buyer must pay the HST upfront, and later submit an application to the CRA to receive a refund. The NRRP Rebate must be applied for within the two-year period following the day the tax becomes payable.

In order to qualify for the NRRP Rebate as a residential purchaser/landlord, you must satisfy the following criteria:

➡️ You are not a co-operative housing corporation;

➡️ You are not a builder of the complex for GST/HST purposes;

➡️ Your purchase of the residential complex, or interest in it, was taxable;

➡️ You paid all of the tax payable on the purchase;

➡️ You are not entitled to claim an input tax credit (ITC) for the GST/HST you paid on your purchase; and

➡️When the tax became payable on the purchase, the residential complex was a QUALIFYING RESIDENTIAL UNIT or the complex contained one or more qualifying residential units.

️Keep in mind, the first use of the unit must be used as a primary place of residence. If you acquire an interest in a house or condominium before anyone has lived in it, or before the complex is registered as a condominium with the primary intention to sell the unit, you will not be eligible to claim the NRRP Rebate.

When applying for the rebate, you will be required to provide supporting documentation along with your application, including a copy of your agreement of purchase and sale, your statement of adjustments received on closing, and your rental or lease agreement.

As with the New Home Rebate, the NRRPR for the federal portion of the GST/HST is reduced where the purchase price exceeds $350,000, and is completely eliminated where the purchase price is equal to or exceeds $450,000. The provincial component of the NRRP Rebate in Ontario, however, is available up to a maximum of $24,000 per unit regardless of the purchase price.

🚨NOTE: if the qualifying residential unit is sold within one year after it is first occupied as a place of residence to a purchaser who is not buying the unit for his or her use as a primary place of residence or for a relation of the purchaser you will be required to repay an amount equal to the rebate plus interest at the prescribed rate.🚨

Disclaimer: the above discussion is limited specifically to the applicability of the NRRP Rebate to purchasers/landlords. For more information, feel free to contact us to discuss your eligibility.