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How to File for the HST Rebate - HST New Housing Rebate or the HST New Residential Rental Rebate

Filing for an HST Rebate

Are you an investor who has recently purchased a new build preconstruction investment property? If this is the case, chances are, you are more than familiar with the HST that had to be paid in full by the time of the final closing.  Only a portion of the 13% is due at the time of closing, which is calculated on a sliding scale depending on the purhase price of the real estate investment, but generally amounts to about 7% of the sticker price of the condo, house or townhome.  This amount due on closing is reffered to as the HST Rebate amount and in many cases, investors can apply to get this back after closing. Most investors are aware of their potential eligibility to file a claim for the HST Newresidential Rental Rebate to recover most, if not all, of the HST you paid for your investment property.
Any investor who has purchased a condominium or a residential home as an investment property from a builder within the previous two years may be eligible to file a claim for an HST New Housing Rebate from the Canadian Revenue Agency. The typical amount of HST that an investor will have to pay on a new build investment property is $16,000 - $29,000. The HST Rebate program has been put in place to help investors recover up to $29,000 of that HST back into their own pockets.
The HST rebate is still relatively new and the rules surrounding the rebate are often a source of confusion. Rules such as when the HST rebate can be applied for, and what specific eligibility requirements have to be met in order to qualify, are often not generally well understood.  Investors sometimes forfeit their right to the rebate and een after the Rebate is awarded, can have it clawed back by CRA and open themselves up to additional audits.  This is due to the fact that the forms are notoriously complex with a series of weighted calculations and not well-advertised rules that CRA operates with.  CRA has developed a new division called the GST/HST Rebate Division that is working to review all preconstructin purchases and "flips" to generate more taxes being collected by auditing investors and denying the HST Rebates. 

Eligibility Requirements for the HST New Rebate as an Investor in Preconstruction Real Estate

When it comes to putting a significant amount of money back into your pocket, as an investor, it pays to know all of the facts about the HST rebate. In order to qualify for an HST New Residential Rental Rebate, all of the following qualifications must be met:
  • Only investment properties that are purchased directly from a builder in Ontario are eligible.
  • Only properties that are non-owner occupied are eligible. Properties that are owner-occupied typically have the HST rebate go directly to the builder and, in return, the builder will cover the cost of the HST on the sale of the property.
  • A one year lease must be in place with a renter. A physical copy of a signed lease proves that the property is an investment property being used for long-term rental.
  • HST rebate claims can only be submitted within two years of the date of final closing for the investment property.
It is important to understand the timeframe for the rebate to be received. Rebates are typically issued within eight weeks of filing for the HST rebate. In some cases, it can take up to a year for the refund to be issued if there is a problem with the file and an audit is triggered.

Getting Help Filing for an HST Rebate

A professional consultation company can help you with the process of filing for an HST rebate. They provide a number of important services related to the HST Rebate. This includes issuing HST Rebate Loans for qualified investors.
HST Rebate Loans are short term loans; they can be issued in the form of unsecured loans or as a second mortgage on the investment property. These loans are available for qualified investors who require money to pay the HST on final closing. Other services include coordinating paperwork and filing HST Rebate applications for clients.
HST Relief: Rebates & Loans is available to answer any questions or concerns you may have concerning the HST and the HST rebate. Discover the convenience that an HST relief company provides in filing for an HST rebate on your behalf as well as professional investment consulting services today. 

How to calculate the HST for a condo bought as income investment property

How do I find out exactly how much I will owe in HST?


By HST Relief (Admin)
The HST due on closing is not the full 13%.  The amount of HST due on closing is the HST Rebate portion.  A very rough calculation of this is 7.8% of the purchase price listed on your Agreement of Purchase and Sale signed with the builder.  However, there are exceptions, as the calculation changes and is weighted based on purchase price. For example, the HST rebate portion for homes over $450,000 is only $24,000.  HST duw on closing ranges from $17,000 - $29,000 depending on your purchase price.
Check out Genworth's calculator for a rough estimate: http://genworth.ca/en/realtors/hst-ontario.aspx
Give us a call with more specific questions: 1.866.832.1990
Email us at: info@hstrelief.ca

What is the HST rebate for income properties?

My husband's colleague told us that there is an HST rebate for our new income property that we bought recently from a builder.  What is this?  How much can we get back in HST? 


By HST Relief (Admin)
If the property that you purchased 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.  Assuming that you paid a large chunk in HST upcon closing (ranges from $17,000 - $29,000), then yes, you are eligible to reclaim the HST through the New Residential Rental Rebate Program.  Certain conditions must be met met in order to reclaim your HST rebate, 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, for which the rebate amount is weighted based on the purchase price of the new construction investment or condo).  This filing must be made under the HST New Residential Rental Property Rebate program.   
HST Relief: Rebates & Loans is here to help with this process.  We will verify the rebate that you are entitled to, and file on your behalf to reclaim your HST rebate amount from CRA.   Call us, we'll put together your filing and you will receive a cheque in 30-60 days.  We also consult our clients on what to expect in terms of closing costs and give you the amount in HST to expect due on final closing.  If you cannot pay the HST bill for your new condo, 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.  Call us for more information - 1.866.832.1990.  info@hstrelief.ca 

HST for a Brampton townhouse?

HST for a Brampton townhouse?
I have bought a Brampton townhouse, but will end up using it as an investment and not moving in.  Do all these same principles described above apply to my townhouse purchase in Brampton?
Many thanks,


By HST Relief (Admin)
Good question - the HST New Housing Rebate process applies to all new construction, whether it is a new condo, new house or new townhome built across Ontario.  Remember that there is also HST Rebates for new homes built on vacant land or for primary residence which have undergone a substantial home renovation.  Call us for more information on filing your HST rebate to get your money back!  1.866.832.1990.

Understading HST on the Statement of Adjustments

I just closed on a new construction investment property and paid over $24,000.  My statement of adjustments from the lawyer actually says on it " Not eligible for the HST New Housing Rebate".  Is this true?  Help!


By HST Relief (Admin)
Statements of Adjustments differ in format, language and terminology used based on whomever the builder's solicitor was who prepared it. I have seen many Statements of Adjustment that are quite cryptic and misleading to the purchaser, such as in the case of stating that you do not qualify for the HST New Housing Rebate.  The HST New Housing Rebate usually refers to the immediate rebate given to the client if they are using the property as their primary residence and results in not having to pay any additional HST at the time of closing.  Likely, this is what that phrase refers to on your Statement of Adjustments - meaning that you don't qualify for the instantaneous rebate but that you must file for a rebate through another program (called the New Residential Rental Rebate program).  If you paid ~24,000 CAD in HST on closing because you are not moving into the property as your primary residence, then you may still qualify to get this portion of the HST back.  You must have a 1 year lease agreement with a renter.  Please give u a shout and we will be happy to prepare your filing.  1.866.832.1990 

HST and selling an investment condo on assignment

I purchased an investment condo in Toronto with an assignment clause a couple of years back and I want to sell it before the final closing date.  Will I get any HST back if I sell this condo on assignment?  And, will owe any HST at the time of closing?


By HST Relief (Admin)
At the time of closing, the CRA will charge you HST on your deposit and on the profit you made for selling the condo.  The CRA considers this transaction a "flip" and you will not receive any HST back.  There is no rebate for selling on assignment, as you describe. 
You are better off to close the property in your name as a rental property, pay the HST portion upon closing and file for the New Residential Rental Rebate to reclaim the HST due on closing.  After 1-1.5 years, you can sell the property and not owe any of this HST.  Hopefully, you will also have made more on your investment in that extra 1-1.5 years that you owned the property.    

Question about investing in Canadian markets

Hello - I recently bought a new construction investment property in Toronto for about 300,000 and I am curious what financial advice you can provide for my upcoming closing?
Thanks you, in advance!


By HST Relief (Admin)
 Hello JackJoe,
Our advice is to start preparing for your closing costs now.  These will include: lawyer's fees, provincial and city land transfer taxes, levies (refer to your Agreement of Purchase and Sale), etc.  Since your property will be an investment property and not your primary residence, be prepared to pay a portion of the HST upon closing.  For a $300,000 purchase price, you will need approximately $22,300.  This amount is fully rebate-able from the CRA, provided that you meet certain conditions (e.g., you must have a 1 year lease agreement in place with a renter).  HST Relief: Rebates & Loans will provide bridge financing for you to close your property (i.e., the $22,300) and then file for the rebate to pay back the loan.  Our clients generally get their rebate in 45-60 days after filing. 
Congratulations on your new investment!

First Canadian Place • 100 King Street West • Suite 5700 • Toronto, ON • M5X 1C7

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