HST Rebate
Substantial Home Construction
BVM Contracting has been completing substantial home construction projects for years, and have been able to help clients gain access to many different types of rebates to help subsidize the cost of renovations, and make it more affordable to invest in their home.
One of the best rebates that we have been able to help our clients access is the Ontario New Housing Rebate/Substantial Renovation Rebate Program. This rebate covers a portion of the HST paid on substantial renovations (full interior renovations, home additions, and custom homes). Before we go into how much of a rebate you are entitled to, how will you know if you will be eligible for the rebate?
Determining whether a building has been substantially renovated
The rule of thumb for determining if your home qualifies for this rebate is to determine if over 90% of the interior of your home has been renovated. There are three ways to determine if your renovations fit this criteria:
Square footage of floor space of the areas renovated compared to the total floor space of the building
Square footage of floor and wall space of the areas renovated compared to the total floor and wall space of the building
Number of rooms renovated compared to the total number of rooms in the building
As long as your renovations total over 90% for any one of these three options, you will qualify for the rebate.
It is important to note that for home additions, the new portion of the home does not qualify in the above calculation. Instead the existing portion of the home will need to be 90% + renovated in order to qualify! If you double the floor space of your existing home with your new addition you will be able to apply.
Another important activity that must be completed to ensure that your renovations qualify as substantial is you must remove/replace/go over 90% the interior walls/ceilings/floors (the drywall/plaster) in the home, which are always counted when considering how much of home was renovated. You can even drywall over the plaster and still count it towards the overall percentage of your home that was renovated!
Every custom or new home construction qualifies for this program as well so if you have created a completely new footprint for your home you will qualify!
If you think your renovation project may qualify for this rebate, BVM Contracting will be able to take a closer look at your existing versus proposed drawings and help you know for sure. Contact us to get the conversation started!
Okay, so now you have figured out that you qualify for the rebate and want to figure out how much your rebate will be, how do you do that?
Where does this type of rebate apply?
The Harmonized Sales Tax (H.S.T.) at 13% (8% PST provincial and 5% federal HST) will apply to purchases of empty land AND services to construct or substantially renovate a property. A portion of the H.S.T. will be your rebate (see the next section).
What Rebates are Available?
There is an Ontario New Housing Rebate and GST/HST New Housing Rebate.
1. Ontario New Housing Rebate
An individual who builds or substantially renovated, or hires someone else to build or substantially renovate, their own house may be entitled to claim an Ontario New Housing Rebate. It is important to note that only a portion of the H.S.T. (i.e. 75% of the Provincial Sales Tax (P.S.T.)) will qualify for the Ontario New Housing Rebate, and the home being renovated is considered ‘new’ once it is substantial renovated.
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, and
$24,000 if the individual paid the HST on the purchase of the land. Remember, resale homes do not qualify for this maximum amount (i.e. homes bought from a current owner of a property).
Want to figure out how much of a rebate you are eligible for? You can do the following calculation to get a good idea:
HST paid on invoices towards project x (0.08/0.13) x 0.75 = Your Rebate
There are other factors that can potentially give you an even better rebate, so make sure you reach out to someone that knows what they are doing when you file in order to maximize your return! BVM Contracting is well-versed in submitting these applications and can make the process very simple.
2. GST/HST New Housing Rebate
In addition to the Ontario 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, and 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. Since you would be hard-pressed to find a home that is less than $450 000 in the Greater Toronto Area, this rebate seldom applies.
Timeline to submit rebate
If an individual begins a substantial renovation of his/her house while living in the house, the individual will have two years from the date the renovations are begun to substantially complete the renovations and another two years after that date to claim the rebate. This means that an individual has 4 years from the start of the renovations to the submission of the rebate application. Since very few renovations ever last 2 full years, we like to advise clients that they have 2 years from the completion of their home renovation to submit to be safe.
How do I submit the rebate information?
The best way to ensure that you get the rebate on time and don’t run into any delays is to allow a professional who completes these rebates to do it for you. BVM Contracting can help you with this process.
How long does it usually take to receive the rebate?
Historically this can take anywhere from 1-2 months. This duration gets substantially longer if there are any issues with the application/submission so it is important to make sure that the company filing for you knows what they are doing and do it right the first time!
Remember: The Home Must be a Primary Residence!
This rebate only applies if it is considered to be your primary residence. Sorry Landlords! If you or one of your family members inhabit the home as a primary residence you will be able to still apply!
How do companies charge for filing rebates for homeowners?
Companies usually take 15-20% of the overall rebate, which turns into $2500-$3200 for a full rebate ($16 080) that you have to pay before you even get the rebate.
BVM Contracting’s Flat Rate Rebate Submission Program
Take advantage of getting your rebate completed through BVM Contracting. We charge only a flat rate that allows you to get as much of the rebate returned to you as possible. Our flat rate offering is substantially less than the percentage-based companies that complete the work. Find out more by contacting one of our Renovation Consultants or filling out your information on our contact page!
Not only does BVM Contracting offer rebate submission services for any homeowner that completes substantial renovations, we also waive the fees for customers who complete substantial renovation work with us, which includes new home construction, home additions, and interior renovations. Just another way that we try to pass along the savings to our customers!
ABOUT BVM CONTRACTING
BVM Contracting is a full-service General Contractor or Home Builder located in Toronto. We provide home renovation and building services for major home renovations (kitchen renovations, bathroom renovations, basement renovations, full interior renovations, home additions, and new home construction). Our goal is to help guide our clients through the process of renovating their home, from concept to completion.
Further than providing General Contracting and Project Management for major home renovations, we also offer value-added services such as renovation financing, renovation rebate consultations and services, building permit and design services, smart home installation services, and real estate investor services.
To learn more about our offering by visiting our services page.