New residential rental property or Investor Rebate

By
Mortgage and Lending with Verico Paragon Prime Capital

New residential rental property or Investor Rebate

In 2000, the GST New Residential Rental Property Rebate (aka the GST Investor Rebate) was introduced for investors who buy or build new residential housing.

 The HST will include a similar rebate, with the same monetary thresholds, tax rates and maximum rebate as the B.C, new housing rebate.

 The B.C, HST investor rebate will also include the two 1-year qualifying conditions in the GST investor rebate program:

 (a) landlords owning the property for a year; and

(b) the first tenant being 'reasonably expected' to occupy it for a year.

 Due to these two qualifying conditions, builders can't credit investors/buyers with the GST investor rebate on closing. Instead, investors must pay the amount of the "lost rebate" to the builder as a closing adjustment, and apply to the Canada Revenue Agency after closing to recoup it. The same will apply under the B.C. HST.

 Transitional rules

Three criteria determine whether B.C. HST is payable on the purchase of a new home/condominium:

 a) When the contract was entered into (the key date being November 18, 2009);

 b) When occupancy or ownership of the property is transferred (the key date being July 1, 2010);

 c) What is being bought (a new home or a new condominium) .

 Four scenarios are possible, each applying equally to owneroccupants and investor/buyers:

 

Description

New home

New Condo Unit

CONTRACT ON OR BEFORE NOVEMBER 18,2009; EITHER OCCUPANCY OR CLOSING BEFORE JULY 1,2010

NO HST

NO HST

CONTRACT ON OR BEFORE NOVEMBER 18, 2009; BOTH OCCUPANCY AND CLOSING AFTER JUNE 30,2010

NO HST

NO HST

CONTRACT AFTER NOVEMBER 18, 2009;

OCCUPANCY OR CLOSING BEFORE JULY 1, 2010

NO HST

NO HST

CONTRACT AFTER NOVEMBER 18, 2009;

BOTH OCCUPANCY AND CLOSING AFTER JUNE 30, 2010

BC HST  applies.

Buyers may be eligilbel for PST TRANSITIONAL HOUSING REBATES  

 BC HST applies.

Buyers not eligilbel for PST Transitional housing  rebate

 

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