Cashing in on GST Rebates – Another Benefit of Living Little

With the Okanagan Mainline Real Estate Board reporting that the average cost to buy a home in the Central Okanagan in March 2016 was $566,762 it is no wonder the GST Rebate available for new home builds is not top of mind for most people.

Since the GST rebate for new home purchases is only available on homes with a sale price of less than $450,000, this rebate offers a real benefit to micro home buyers. Qualifying is quite simple, if your house (land and building costs) are $350,000 or less you will see the full value possible of the new home rebate which is 36% of the GST . If your value totals between $350 - $450K then there is a partial GST rebate available. As mentioned, $450,000 is the cap, there are no rebates available on homes over this value.

If your purchase price falls within these values, there are two ways micro home purchasers are able to qualify for a GST rebate:

1. New Housing Rebate for Owner Built Homes – this application for a GST rebate applies to people who are putting a micro home on an existing property. For example: As a carriage or laneway home.

2. New Housing Rebate for New Homes Purchased from Builder – this application for a GST rebate applies to people who are purchasing both the building and the land from a builder. For example: A Micro Home in a development.

The GST rebate amount is the same for both qualified buyers. Here are some examples to give you an idea:

On a house selling at $350,000, the GST would be $17,500 and the applicable rebate (35% of $17,500) is $6,300. This is calculated using the following formula: 6,300 x [$450,000 – the purchase price] / $100,000

Little House Contracting is happy to help you explore the many great benefits of Living Little!

Resources:

Okanagan Mainline Real Estate Board:

http://omreb.com/matrix/documents/03%20-%20CO%20Statistics%20March%202016.pdf

Canada Revenue Agency

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/hsng/rbts/menu-eng.html?emaillink