The History of HST Real Estate Rebates in Canada

The New Home Rebate Program (NHR)

Under this program, eligible applicants must occupy the property as a principal resident, which means living there for most of the time, and at least for the first complete year. In most situations, the property developer claims the NHR, and the buyer receives a “rebate” built into a discounted purchase price. Without living in the premises for at least the first year, purchasers may well be required to pay Canada Revenue Agency back the entire HST rebate amount. Also important with the NHR, is to formally claim the new residence as a “principal” residence. It means changing over address details on all relevant documents (driving license and health card). Under the NHR, purchasers could also receive an HST rebate when an immediate member of the family will live in the new home. This provision only applies to direct relatives, like parents, or grandparents, or husbands/wives). More distant relatives are not eligible here.

Residential Rental Property Rebate

Real estate investors who plan to lease a new home or condo after purchase, must apply for their HST rebate through the Residential Rental Property Rebate. These types of investors, including foreign nationals, are eligible for an HST rebate. They must provide a formal one-year residential lease agreement that proves the newly built premises will be leased to a tenant.  These investors must pay the required HST amount when purchasing, and will be reimbursed after processing. Under the Residential Rental Property Rebate, investors who “flip” ownership of their property prior to one year of ownership will be required to pay the HST amount in full, and without getting a rebate. After the first complete year, the premises can be sold without sacrificing the rebate.