GST/HST New Residential Rental Property (NRRP) Rebate in Ontario
The NRRP Rebate is available to property investors and landlords who meet certain criteria. Eligible claimants can claim up to $6,300 federally and $24,000 provincially (in Ontario).
Common Types of Landlords who are Eligible for the NRRP Rebate
A landlord who purchased a newly constructed or substantially renovated residential rental property
A landlord who built their own residential rental property
A landlord who made an addition to a multiple-unit residential rental complex
Some Tips and Traps
To qualify for the NRRP Rebate, you need to provide a formal lease agreement to prove that the new home has been rented to the tenant for at least the first 12 months after the acquisition of the property. A rebate claim must be submitted within two years of the closing date.
If the landlord sells the property within one year, the rebate amount received must be returned to CRA in full, with interest at the prescribed rate.
How much HST rebate can I get?
The amount of the HST rebate depends on the price of the new home. The federal calculation and the provincial calculation are different. For illustration purposes, if the landlord paid GST at 5%, or HST at 12% or 13%, or HST at 14% after March 31, 2013, or at 15% after June 30, 2010, the calculation for the federal portion is as follows:
If the fair market value on the qualifying property at the time tax was payable is $350,000 or less, the federal portion of the tax rebate = property price x 5% x 36% (Maximum $6,300).
If the property value is between $350,000 and $450,000, the federal portion of tax rebate = ($450,000 – property price) / $100,000 x 6,300 (The federal tax credit declines significantly as property price rises).
Once a home exceeds $450,000, there is no federal portion of the tax rebate.
In Ontario, the provincial portion of the HST rebate is capped at $24,000. The threshold for the property price and the formulas are different from the federal’s.
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