The GST New Housing Rebate is available in full only to purchasers new homes priced up to $350,000. It is phased out progressively for new homes priced between $350,000 and $450,000. New homes priced at $450,000 or more are ineligible for any portion of the rebate. In 1991 the government made a commitment to revise the thresholds in line with market prices to protect housing affordability over time. The Technical Paper on the GST says: “The government will review these thresholds at least every two years and adjust them as necessary to ensure that they adequately reflect changes in economic conditions and housing markets.” The rebates have never been adjusted.
Upon implementation of the Harmonized Sales Tax (HST) on July 1, 2010, British Columbia has set a threshold of $525,000 – purchasers of new homes up to that amount will be eligible for a 71.43 per cent rebate of the provincial portion of the HST paid on a new home to a maximum of $26,250. Homes above $525,000 will receive a flat rebate of $26,250.
In Ontario, the rebate threshold is $400,000. Buyers of new homes will be able to claim a rebate of 75 per cent of the provincial portion of the HST paid on the purchase of a new home to a maximum of $24,000. Homes above $400,000 will receive a flat rebate of $24,000.
Victor Fiume is the General Manager of The Durham Group which specializes in the development of single-family homes and townhouses. He is a former President of the Ontario Home Builders’ Association and the Durham Region Home Builders’ Association.
The Canadian Home Builders’ Association (CHBA) is the national voice of the residential construction industry, representing more than 8,000 member firms across the country. Membership comprises new home builders, renovators, developers, trade contractors, building material manufacturers and suppliers, lenders and other professionals in the housing sector.