Can I claim the enhanced HST rebate on an assignment?
An assignment produces a new agreement with a new date on it, which is exactly why buyers assume the window has been reset. The Canada Revenue Agency anticipated that and closed it.
The short answer
Robin Patel, a REALTOR® in the Greater Toronto Area, explains that Ontario's enhanced new housing rebate reaches an assignment only where both the original builder agreement and the assignment agreement were entered into inside the qualifying window. Taking over an older agreement does not restart that clock, and the Canada Revenue Agency says so expressly.
Written forBuyers taking over a pre-construction agreement from another purchaser in the GTA, and anyone being offered an assignment on the basis that the HST relief comes with it.
The short version
- On an assignment the rebate requires two agreements to qualify, not one: the original agreement with the builder and the assignment agreement must both fall inside the window.
- Where the original agreement predates the window, assigning it does not move it. The Canada Revenue Agency deems the agreement to have been entered into on its original date, and the enhanced rebate is not available.
- That deeming applies equally where an older agreement is varied or altered rather than assigned.
- A buyer in that position may still be eligible for the ordinary Ontario new housing rebate or the first-time home buyers rebate, which are separate claims with their own conditions.
- The usual conditions still apply to an assignee: the home must be acquired as a primary place of residence for them or a relation, they must be the first to occupy it, and it cannot be a rental.
Two agreements, and both of them have to qualify
An assignment is the sale of a contract rather than the sale of a home. The assignee steps into the rights and obligations of the original purchaser under that person's agreement with the builder, and the home itself may not exist yet.
For the enhanced rebate that structure creates two relevant agreements, and the Canada Revenue Agency requires both of them to sit inside the qualifying window. Not the assignment alone, and not the original alone. Both.
This is the condition that decides most assignments being marketed today, because the agreements in circulation were frequently signed well before the window opened. The unit can be ideal, the price can be fair, and the rebate can still be unavailable on a date neither party can change.
Not the assignment alone, and not the original alone. Both.
Assigning an older agreement does not reset the date
This is the part worth reading twice, because the paperwork argues the other way. An assignment produces a freshly signed document with a current date on it, and it is natural to treat that as the date of the agreement.
The Canada Revenue Agency addressed this directly. Where an agreement was entered into with a builder before the window opened and is later varied, altered or assigned, the agreement might otherwise be considered to have been entered into on the later date. For the purposes of this rebate it is deemed to have been entered into on the original date, and the enhanced rebate is not available.
So the answer does not turn on when the assignment was signed. It turns on when the person before you signed with the builder, which is a fact about a document you were not party to and may not have been shown.
It turns on when the person before you signed with the builder
What may still be available instead
Falling outside the enhanced rebate is not the same as falling outside every rebate. The Canada Revenue Agency notes that an individual in that position may still be eligible for the ordinary Ontario new housing rebate or for the first-time home buyers rebate.
Those are separate claims with their own conditions, and the agency sets that out in the context of a changed agreement rather than as a rule about assignments specifically. It is a reason to ask the question, not an assurance that something will be recoverable.
Which of them a particular assignment engages is a question for an accountant or the lawyer reviewing the assignment, and it should be asked before the agreement is firm. It changes what the purchase actually costs.
It is a reason to ask the question, not an assurance that something will be recoverable.
What else has to be true for an assignee
Meeting the date condition is necessary and not sufficient. The home has to be acquired for use as a primary place of residence for the assignee or a relation, the assignee or their relation has to be the first to occupy it after construction is substantially completed, and it cannot be taken as a rental.
That last point catches assignments in particular, because an assignment is often bought as an investment. An assignee who intends to rent the unit out is on a different footing entirely, and the claim being described here is not theirs.
There are also construction and completion deadlines attached to the relief, which are a question for the lawyer reading the builder agreement rather than something a buyer can establish from the listing.
Meeting the date condition is necessary and not sufficient.
Written by
Robin PatelSalesperson · The Agency Toronto
Updated
Published
Read in your language
A machine translation, not Robin’s words. For anything that decides money, ask him in Gujarati or Hindi directly.
