I have talked to several real estate lawyers and a few accountants and no one can give me a definite answer. Everyone seems to be telling me something different.AFAIK the HST rebates are only for primary residences AND NOT for investment properties.
Here is the situation.
My parents are looking to purchase a new condo. Either 1 through assignment that closes in a couple months or 1 to 2 pre construction units that close in 2014.
If they treat this as investment property with intent to rent it out right away what kind of taxes (HST) would they have to pay on the purchase, and how much of this is refundable. I have heard rates such as 1.5%, 7.8% and 13%. Some people have said they get all of it back up to $24,000 per unit and some have said they only get up to 6% back. Everyone is giving me a different answer :S
Option 2.
The condo is purchased by them. But one of there siblings who are over 18 will live there for a bit. Since it would be a principal residence we would not have to pay any extra HST.. Say the sibling moves out and then they decide to rent the place. How are they effected? How long does the sibling have to live there? Can the property still remain as principal residence or does it have to turn into rental unit.
any help is appreciated.
May be this link can provide some answers http://www.rev.gov.on.ca/en/notices/hst/pdf/04.pdf
"Primary place of residence
One of the main conditions for a new housing rebate to be available is that you must buy or build the house for use as your or your relation’s primary place of residence.
Your primary place of residence is generally a house that you own, jointly or otherwise, and that you intend to live in on a permanent basis. You may have more than one place of residence, but you are considered to have only one primary place of residence.
Note
If you buy or build a new house in Canada but your primary place of residence remains outside Canada, then your house in Canada would be a secondary place of residence and would not qualify for the new housing rebate.
The following are examples of some of the factors we may consider to determine whether a house is your or your relation’s, primary place of residence for purposes of the new housing rebate:
•whether you consider the house as your main residence;
•the length of time you inhabit the premises; and
•the designation of that address on personal and public records.
To be eligible for the new housing rebate, your intent to use the house as your or your relation’s, primary place of residence must be evident at the outset of buying, constructing, or substantially renovating the house.
For rebate purposes, a house is not your primary place of residence if, for example, your intention is to use the house as your primary place of residence upon some more distant occasion, such as retirement. Further, a recreational cottage or an investment property is not your primary place of residence for rebate purposes. No new housing rebate is available in these cases."
