GST Rebate On New Residential Rental Property

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If you are buying a new residential property for the purposes of renting out and the Fair Market Value of the property is less than $350,000.00, you are in luck to claim 36% rebate on the GST paid to the CRA. This rebate reduces proportionately on a sliding scale if the value of the property is between $350,000 to $450,000. There is no rebate if the value of the property is more than $450,000.

GST rebate application must be made by the purchaser with CRA directly within two years of buying a residential unit on form GST524 (google it). Instructions on how to complete the application are available at RC4231(google it). A Notary must ensure that he makes his clients is aware of this important aspect and obtain the Fair Market Value (FMV) from the builder/vendor at the time of purchase.

Following documents must be enclosed with the application (copies are accepted):

statement of adjustments prepared by the Notary or the lawyer; the purchase agreement (only for claimants who have purchased the single unit residential complex); the lease/rental agreement; or the insurance policy (that the claimant has on the property, not the lessee insurance policy);

Facts declared at the time of application are subject to Audit by CRA and requisite documentation must be preserved for a period of six years.

Definitions and calculation of the GST rebate have been elaborated at GST/HST Technical Information Bulletin B-087 for ease of understanding.

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