What distinguishes the GST/HST new housing rebate in Ontario when it comes to a contract assignment versus a title deed transfer among family members?
The GST/HST New Housing Rebate in Ontario is a tax rebate available to individuals who buy or build a new home, and it can apply in different scenarios, including after a contract assignment or when the title deed is transferred among family members. Here’s a breakdown of the differences between these two situations:
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?1. GST/HST New Housing Rebate After a Contract Assignment
- What is a Contract Assignment??
? A contract assignment occurs when the original buyer of a new home (the "assignor") sells their rights and obligations under the purchase agreement to another buyer (the "assignee") before the home is completed or the title is transferred.
?- Rebate Eligibility for the Assignee: ?
? - The assignee (new buyer) may be eligible for the GST/HST New Housing Rebate if they meet the rebate criteria (e.g., the home is their primary residence, and they are an individual, not a corporation).
? - The assignee is treated as the purchaser of the home for GST/HST purposes, and the rebate is based on the price they paid for the assignment, plus the amount originally paid by the assignor to the builder.
?- Rebate Eligibility for the Assignor:?
? - The assignor (original buyer) is generally not eligible for the rebate because they did not take possession of the home or use it as their primary residence.
? - The assignment may be subject to GST/HST on the profit made from the assignment, depending on the circumstances.
?- Key Consideration: ?
? The rebate amount for the assignee is calculated based on the total consideration paid (assignment price + original purchase price), and the assignee must meet all other rebate conditions.
??2. GST/HST New Housing Rebate After a Title Deed Transfer Among Family
- What is a Title Deed Transfer Among Family??
? This occurs when the title to a new home is transferred from one family member to another (e.g., parent to child, sibling to sibling) after the home is built or purchased.
?- Rebate Eligibility for the Transferee (Family Member Receiving the Title):?
? - The transferee may be eligible for the GST/HST New Housing Rebate if they meet the rebate criteria (e.g., the home is their primary residence).
? - The rebate is based on the fair market value (FMV) of the home at the time of the transfer, not the original purchase price.
?- Rebate Eligibility for the Transferor (Family Member Transferring the Title):?
? - The transferor is generally not eligible for the rebate because they did not use the home as their primary residence after the transfer.
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? - The transfer may be subject to GST/HST if the transferor is considered to have sold the home in the course of a business or adventure like trade.
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?Important Notes
- In both scenarios, the rebate is only available if the home is used as the primary residence of the individual claiming the rebate.
- The Canada Revenue Agency (CRA) has specific rules and conditions for each scenario, so it’s important to consult a tax professional or review CRA guidelines to ensure compliance.
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If you’re dealing with either situation, it’s advisable to seek professional advice to navigate the complexities of GST/HST rebates and ensure you maximize your eligibility.
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Moe and Maher Dib | CITYVIEW Realty Inc., Mississauga
Your Trusted Real Estate Advisors. Your Dream, Delivered.
Moe Dib, Realtor
(647) 500.2214
Maher Dib, Realtor
(647) 405.2214