Real property; GST and rebates.

Author:Moeini, Faezeh

Sales of used residential complexes are generally exempt from GST/HST however; the GST/HST applies on sales of new residential properties. The New Housing Rebate and New Residential Rental Property Rebate permit recovery of a portion of the GST/HST that is paid on a newly constructed or substantially renovated residential unit. These rebates are available if certain conditions have been met.

Key Definitions

Residential complex; subsection 123(1)

Key points regarding the definition of the residential complex are that it:

* contains includes adjacent land and common areas which are necessary for enjoyment; * can be a house, row house, condo unit, mobile or floating home, apartment or similar premises, student and senior residences, or residence for persons with disabilities; * excludes boarding house, hotel, inn, motel; and * must be occupied by a person as a place of residence or is intended to be occupied as a place of residence. It is necessary to determine a reasonable portion of the land and common area that is "necessary for the enjoyment of the residential complex". Just like the definition of a principal residence in the Income Tax Act, up to one-half a hectare of land may be included in a principal residence without question; any land in excess of this amount must be proven to be required for enjoyment of the property.


The definition of the builder includes a person who;

* has an interest in real property and carries on or engages someone else to carry on the construction or substantial renovation of the property; or * acquires the interest in a residential complex before the construction or renovation is completed. Substantial renovation

Substantial renovation makes a building look like a new building. This means that 90% or more of the whole or that part of the building (other than the foundation, exterior walls and supporting walls, floor, roof and staircases) has been removed or replaced.

Residential Real Property--Federal New Housing Rebate

The new housing rebate is designed to refund a portion of the federal component of the GST/HST that is paid on the purchase of a new or substantially renovated residential unit if the property/unit is bought as a person's primary place of residence. Ontario offers a similar rebate regarding the provincial component of the HST and Nova Scotia offers a sales tax rebate. The rebate must be applied for within two years of the transfer of ownership date or possession.

To be eligible for...

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