Do I qualify for Ontario's enhanced HST rebate on a new home?

Which date decides it — the day you sign, or the day you close?

A pre-construction purchase has two dates that matter to a buyer, and they can be years apart. There is the day you sign the builder's agreement of purchase and sale, and there is the day the deal finally closes and title moves to you.

For this relief the first date is the one that counts. A buyer who signed inside the window and closes long afterwards is inside it. A buyer who closes next month on paper signed before the window opened is outside it, and nothing about the closing changes that.

This is the opposite of how most closing costs behave. Land transfer tax, the adjustments, the lawyer's account: those all attach to the closing. A buyer who assumes this one works the same way can sign a week late and never know what it cost.

Do you have to be a first-time buyer?

No, and this is where most of the confusion on the subject comes from. There is a separate federal measure aimed specifically at first-time buyers of new homes, and because the two arrived close together they are routinely described as one thing.

They are not. The enhanced provincial rebate is not limited to buyers who would qualify as first-time, which means a move-up buyer purchasing a new home to live in is not excluded from it on that ground alone.

Robin Patel works through which of the two a particular purchase engages, because the answer changes what the builder should be crediting and what the lawyer should be checking before closing.

What the relief requires you to do with the home

The home has to be intended as a place of residence for you or for a relation. That is the condition that does the real work, because it is the one that separates a family buying a town to live in from an investor buying the identical town to rent out.

An investor is not simply refused and sent away — there is a different path in the legislation for a new home bought to be rented. But it is a different claim with different conditions, and it is not the one this page is about.

If the plan is genuinely undecided at signing, that is worth saying out loud to the lawyer before the agreement is firm rather than after, because the intention at the time of the purchase is what the claim rests on.

Who actually claims it — you, or the builder?

On a straightforward purchase from a builder the rebate is normally handled as a credit on the statement of adjustments. You do not pay the full tax and then apply to get part of it back; the builder reduces what you owe on closing and recovers it themselves.

That is convenient and it is also where it goes wrong. The credit depends on paperwork the builder prepares and on a certification you sign, and if the forms are not right the credit can be reversed afterwards and come back to you as a demand.

So the question to ask is not only whether you qualify. It is whether the builder is crediting it, what you are signing to confirm it, and what happens if the claim is later disallowed. Those answers belong in the agreement, not in an email.

What to establish before the agreement is firm

A pre-construction buyer has a short window in which questions are still cheap, and it closes when the agreement does. The points below are the ones that decide whether this relief is actually available on the purchase in front of you.

• What date will appear on the executed agreement of purchase and sale, and is it inside the window?
• Is the home intended as a residence for you or a relation, and does the agreement say anything inconsistent with that?
• Is the builder crediting the rebate on closing, or is this a claim you make yourself afterwards?
• What is the construction and completion timing in the agreement, and does it sit inside what the relief requires?
• Has the lawyer reviewed the rebate wording specifically, rather than the agreement generally?