This info blog provides information for individuals who build or substantially renovate, or hire someone else (Slotegraaf Construction) to build or substantially renovate their own home. It explains who qualifies for the rebate and provides links for the homeowner to research more in-depth on the CRA website and print off applicable forms.

New Housing, Substantial Renovations, & Additions

The term ‘new housing’ used throughout this info blog refers to newly constructed housing, substantially renovated homes, and major additions with extensive renovations.

• Existing housing that has been substantially renovated is generally given the same treatment under the GST/HST guidelines as newly constructed housing. Extensive modifications, generally defined as 90% of the building interior that existed before the renovation began must be renovated to some minimum degree in order to meet the definition of “substantial renovation” for GST/HST purposes.

• Major additions, when paired with an extensive renovation to the existing home, may be so significant that the resulting structure is viewed as a newly constructed residential home. Factors to be considered are 1) the addition should at least double the floor space of the existing home before the renovation, 2) the existing home must change physically, ie. interior walls moved, plumbing fixtures upgrades, cabinetry and countertops replaced. Physical changes of this nature must happen in at least 50% of the rooms, and 3) a fundamental change in how the rooms in the existing house are used has occurred as a result of the integration with the new addition. In essence, there must be interdependency between the existing home and the new addition.

For full explanation of the factors to consider in deciding if a substantial renovation or addition where extensive renovations have taken place qualify, refer to Technical Information Bulletin B-092, Substantial Renovations and the GST/HST New Housing Rebate. In both cases however, the cost or fair market value of the major addition or renovation is not be used in determining whether a new residential house has been constructed.

How will the GST/HST apply?

In general, the HST at 13% (5% federal HST part and 8% PST provincial part) will apply to purchases of empty land and services to construct or substantially renovate a property. If the land was purchased before July 1, 2010 special transition rules may apply.

What Rebates are Available?

There is a GST/HST new housing rebate AND an Ontario new housing rebate.

GST/HST New Housing Rebate

The GST/HST New Housing Rebate is generally available if the individual builds or substantially renovates housing for use as the primary place of residence of the individual, or a relative, the fair market value of the housing (building and land) upon substantial completion of the housing is less than $450,000, and all the other rebate conditions are met. The maximum rebate amounts are reflected on the GST/HST new housing rebate application and are explained in the Guide RC4028, GST/HST New Housing Rebate

Ontario New Housing Rebate

An individual who builds or substantially renovates, or hires someone else to build or substantially renovate, their own house may be entitled, in addition to the GST/HST New Housing Rebate, to claim an Ontario new housing rebate in respect of the PST provincial part of the HST paid by the individual to build or substantially renovate their house. This rebate is not subject to any fair market value limits like the GST/HST New Housing Rebate.

The Ontario new housing rebate will be equal to 75% of the 8% PST provincial part of the HST paid to a maximum rebate amount of:

• $16,080 if the individual did not pay the HST on the purchase of the land or leases the land,

• $24,000 if the individual paid the HST on the purchase of the land

What Forms Do I Need To Print Off?

Print all of the following forms:

For the Ontario new housing rebate: RC7191-ON. For the GST/HST New Housing Rebate Application: Form GST 191, GST/HST New Housing Rebate Application for Owner-Built Houses AND Form GST 191-WS, Construction Summary Worksheet

For additional assistance please e-mail deb@slotegraafconstruction.com.