I've been trying to do some research to finally understand this rebate situation, I see most sites say that buying a new home over 500K is INELIGIBLE for the HST rebate but other sites (fewer) saying that they can apply for the rebate but only up to a maximum of 24K. Can someone please clarify this? Especially with more and more condos being over 500K I would think that this is pretty huge in terms of cash outlay. Thanks.
I've been seeing this question alot.
Essentially you will have a rebate of 75% of a new home purchase under $400,000 on the PST part of your HST tax.
I'll give you three examples examples
1. First example at the limit where purchase price is 400,000
GST (5%) = $20,000
PST (8%) = $32,000
HST = PST + GST = $52,000
Rebate = $32,000 x 75% = $24,000
So at 400,000 you get your max rebate or 24,000.
2. Purchase price of $800,000
GST (5%) = $40,000
PST (8%) = $64,000
HST = PST + GST = $104,000
Rebate = $24,000
At 800,000 you get a max of 24,000 (75% of the first 400k) the remaing 400k you are taxed fully
2. Purchase price of $100,000
GST (5%) = $5,000
PST (8%) = $8,000
HST = PST + GST = $13,000
Rebate = $8,000 x 75% = $6,000
At 100k you get the full 75% rebate on the extra HST (PST)
In the end if you purchase a home at 400k and under you pay around 2% extra then you would before the hst took effect, but if you purchase a home over 400k you start to get fully taxed on every penny you spend beyond the intial 400k.
This is my understanding. I hope it helps. Maybe I will put together an excel sheet that takes in your purchase price and calculates HST, Rebate and Land Transfer Tax.
