Buying or Purchasing a Condo….and HST
When you purchase a new home, one is overcome with joy and excitement. The last thing on the mind of the future home owner is HST.
However, we find that many people are not aware of the complexities involved with HST around their purchase. When you purchase a NEW condo, house, etc. (please note that HST does not apply to resale properties), the HST rebate helps first time home buyers and investors reduce the HST on the purchase. Most of the time, the HST rebate is built into the selling price from the builder; therefore, the selling prices offered to the buyer is lower. The builder can do this on premise that the home owner will be claiming that property as their principal residence or the owner will be renting out the property for more than year.
Many home owners who sell their home too soon, get a knock on the door from the CRA requesting a payment of the tax rebate. The amount of tax that can be requested by the CRA can be a significant payment for the average Canadian. That is why making informed decisions at the time of purchase and sale of the home is critical. Also, read this article from CPA Canada titled "avoid the pitfalls to succeed with real estate investments".
For more information on HST and purchasing a home, please contact an MP Group expert.