Custom home builders in Mississauga
When you work with a builder for a “build to suit” deal, you, (the purchaser,) can buy the land from the builder and then pay them to carry on and build your custom dream home. One of the benefits of buying a custom home and land package is that the builder will not have to charge HST on the entire cost of land and home. In these instances, HST would only be payable on the build portion. Another advantage is that the builder may have already devised plans on how to build a custom home on the land in order to make the best use of it. You, the purchaser can benefit from those plans.
HST New Home Rebate
When you buy land for a custom home, there are many ways in which to obtain an HST rebate from the Canada Revenue Agency (CRA). An HST rebate is available under the GST/HST system to recover amounts paid in error or where the rebate is intended to provide specific relief to the taxpayer, such as the HST New Home Rebate.
Home and land package customers in Toronto can benefit from the HST New Housing Rebate (or HST new home rebate) which is available to people who buy a new custom home (or a renovated home) from a builder or who hires a builder to build a new custom home for them on their existing property and land. If you would like to buy land and have a custom home built on it, be aware that Ontario has its own HST new home rebate, called the HST New Housing Rebate, (NHR.)
The NHR allows purchasers to get back some of the federal portion of the HST, currently 5% in Ontario. For homes with a price up to $350,000, buyers can get back a rebate of 36% of the 5% federal portion. This rebate goes down on a sliding scale when the purchase price is $350,000-$450,000. If the bottom price is $450,000 or more then the federal portion becomes unavailable.
With reference to the remaining 8% of the HST, (the provincial portion,) purchasers can recover 75% of the 8% provincial portion up to a maximum of $24,000. Unlike the federal portion, the amount of the provincial portion of the NHR does not slowly decline once the purchase price reaches $350,000. The provincial portion of the NHR doesn’t apply to purchase prices in excess of $400,000 which would limit the amount of the provincial portion to $24,000. The HST NHR for property purchased in Ontario is available up to $24,000 with no claw-back at the moment.
HST New Home Rebate for Rental Property
Similar to the HST New Home Rebate mentioned above, there is an HST rebate in Ontario for homes which are purchased to use as an investment property (i.e., rental homes). In Ontario, the HST New Home Rebate for a rental home can be $24,000 and therefore is worth considering when looking at these custom home and land packages.