GST and Real Estate
|When you buy a newly constructed home, condominium or town home, the entire purchase price including land is taxable. If the property is to be rented to tenants, the full 7% GST is charged on the purchase price. However, if the home is going to be your primary place of residence, it may qualify for a partial GST rebate, depending upon the sale price.
For homes costing $350,000 or less, you will receive a rebate of 36% of the GST paid, to a maximum of $8,750. That means you pay approximately 4.5% GST (not 7%) on the purchase price.
1) $150,000 x 7% = $10,500
Rebate = $8,750 x ($450,000 - Selling Price) / $100,000
1) $400,000 x 7% = $28,000 (GST)
If you buy a substantially renovated home from a builder who supplies both the land and the house as a single transaction, the same GST rebate conditions described above apply. Your REALTOR can explain how the Federal Government defines "substantially renovated."
GST and Land
The rebate would be the same as for a new home. That is, when the total value of the land and home is $350,000 or less, the rebate would be 35% of the GST paid on the building and the land to a maximum of $8,750.
When the total value of the land and house exceeds $350,000 but is less than $450,000, a proportional formula for calculating the GST rebate applies.
As with other new home purchases, GST rebates are not available for land and buildings valued at $450,000 or more when you build a house on your lot.
please note the above figures use 7% and since the GST was changed to 6% these caclulations may change, please consult your solicitor before using these calculations to ensure accuracy
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Copyright © A. Mark Argentino, P.Eng., Broker, RE/MAX Realty Specialists Inc., Brokerage, Mississauga, Ontario, Canada L5M 7A1 (905) 828-3434 Google First created - Tuesday, July 16th, 1996 at 3:48:41 PM - Last Update of this website:
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