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ARTICLE · 06 APRIL 2018

A Cautionary Tale Regarding The GST/HST New Housing Rebate

Miller Thomson
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As an incentive to a prospective buyer, a builder may offer to provide a credit to decrease the purchase price of a newly-constructed or substantially renovated detached house, duplex, or condominium unit in exchange...

CanadaTax
Colleen Ma
Colleen Ma
Arthur Opalinski
Arthur Opalinski
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As an incentive to a prospective buyer, a builder may offer to provide a credit to decrease the purchase price of a newly-constructed or substantially renovated detached house, duplex, or condominium unit (collectively referred to as a "Home") in exchange for the buyer transferring to the builder their new housing rebate. However, buyers requiring mortgage financing assistance from an extended family member or friend should beware that the rebate may be lost if the individual providing assistance is a party to the agreement of purchase and sale.

New Housing Rebate

While a used residential Home is generally exempt from GST/HST, a new build is subject to GST/HST. The new housing rebate, pursuant to subsection 254(2) of the Excise Tax Act (Canada) (the "ETA"), allows for the partial recovery of GST or the federal portion of HST paid for a new or substantially renovated Home that is intended to be used by the buyer (or a relation) as his or her primary place of

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