# HST rebate for new house



## pearl (Mar 5, 2015)

Bought a new house recently. I am going to rent it out after closing. Based on the sales rep, I need to pay $24k HST during closing. But they said that government will not refund all $24k after one year as it was before. They said government will retain $2K to $6k but not sure exactly how much it will be. Anyone in the forum knows this? It is in Richmond Hill, Ontario. Price is about $900K.
Thanks in advance.


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## themortgageguy (Jun 28, 2012)

pearl said:


> Bought a new house recently. I am going to rent it out after closing. Based on the sales rep, I need to pay $24k HST during closing. But they said that government will not refund all $24k after one year as it was before. They said government will retain $2K to $6k but not sure exactly how much it will be. Anyone in the forum knows this? It is in Richmond Hill, Ontario. Price is about $900K.
> Thanks in advance.



Here you go Pearl. Link to site which tells you which rebate you get and a form to calculate it.

https://www.canada.ca/en/revenue-ag...n/new-residential-rental-property-rebate.html.

Sent you a PM as well.


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## Just a Guy (Mar 27, 2012)

How do you expect to break even renting a 900k house?


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## marina628 (Dec 14, 2010)

JAG in Richmond Hill new build rent for as much as $5000+ a month ,not something I would do but there is a market for it up there.


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## themortgageguy (Jun 28, 2012)

Just a Guy said:


> How do you expect to break even renting a 900k house?



really depends on how is being put down on the property right? Also maybe the desire is to create a loss. not all that unusual


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## pearl (Mar 5, 2015)

themortgageguy said:


> Here you go Pearl. Link to site which tells you which rebate you get and a form to calculate it.
> 
> https://www.canada.ca/en/revenue-ag...n/new-residential-rental-property-rebate.html.
> 
> Sent you a PM as well.


Thanks themortgageguy. Provincial tax is about 63K for a property price of 900k. 75% of 63K is still ways more than 24K. It seems I can claim all $24K back. 
But sales rep said his nephew only got 18k back in rebate when he bought house in Thornhill. I do not know how it happened.


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## pearl (Mar 5, 2015)

Just a Guy said:


> How do you expect to break even renting a 900k house?


I do not expect to break even.  It is impossible. Hoping for capital gain 10 years later.


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## themortgageguy (Jun 28, 2012)

pearl said:


> I do not expect to break even.  It is impossible. Hoping for capital gain 10 years later.


I figured as much


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## pearl (Mar 5, 2015)

marina628 said:


> JAG in Richmond Hill new build rent for as much as $5000+ a month ,not something I would do but there is a market for it up there.


Actually, rent could be between 2500 and 2700 a month.


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## marina628 (Dec 14, 2010)

I don't know your home details but check realtor.ca ,my friend rents top part for $3500 plus and lives in basement of hers.Then again $900,000 today may only buy a townhouse lol .


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## pearl (Mar 5, 2015)

marina628 said:


> I don't know your home details but check realtor.ca ,my friend rents top part for $3500 plus and lives in basement of hers.Then again $900,000 today may only buy a townhouse lol .


Yes, it is a 3 bedroom townhouse


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## marina628 (Dec 14, 2010)

Too bad you did not ask for advise before you bought it because there are many good places in GTA where you can do well with that budget .


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## themortgageguy (Jun 28, 2012)

marina628 said:


> Too bad you did not ask for advise before you bought it because there are many good places in GTA where you can do well with that budget .



How do you know Pearl didn't ask for advice? Maybe Pearl didn't need it This could be a great deal..we don't know anything about the property or location etc...


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## marina628 (Dec 14, 2010)

I am basing my opinion on her purchase price of $900,000 and what she said she can rent it for without factoring in the property taxes ,if any condo fees ,the cost of exterior maintenance etc.I live in million dollar plus home myself but I would not buy one to rent out .


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## sags (May 15, 2010)

Buying a $900,000 condo and then renting it out for a loss would normally be a really dumb idea.

But look at the real estate and rental markets. Home prices and rents are both rising 15% or more a year.

15% of $900,000 is a pretty good return on investment, even if it does involve subsidizing 12 months of rent.

The question is............how much longer can home prices and rental rates rise faster than wages ?

Perhaps a long time if the government extends amortizations, which I have predicted are inevitable before.

It looks like at least a couple of political parties favor 30 year amortizations, but I wonder if they would go far beyond that to 40-50 year mortgages.


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## marina628 (Dec 14, 2010)

You can buy better deals that will still increase same % .Jag would buy 10 houses for same money although for me 2 x $450,000 that rents for $2200 works.I seen 2 bedroom 2 bathroom in Bowmanville go for $2400 a month recently.


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## sags (May 15, 2010)

Maybe, but home prices in Toronto rose 7.1% while prices in Edmonton fell 6.06%, so the "capital gains" strategy may not be equally viable everywhere.

_The average price of residential homes in Edmonton is continuing to fall, according to figures released Tuesday. Prices for residential homes are down to $351,526 on average, a decrease of 6.06 per cent from $374,219 in September 2018, according to new numbers from the Realtors Association of Edmonton.Oct 2, 2019_

_The average price of a detached home sold in Toronto last month was $1.04 million, versus $617,658 for condominiums. The average price of a home in Toronto and its suburbs rose 7.1 per cent from a year earlier to $843,637 in November._


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## marina628 (Dec 14, 2010)

I don't count on capital gains income but look at 20% down and finding a property I can rent to cover all costs.They do exist just take a bit longer to find .


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## pearl (Mar 5, 2015)

Thanks everyone for the input.
The reason I chose this townhouse is mainly because it is close to my home. It is more convenient to take care of it.
In the next 10 to 15 years, if house appreciation can be close to that of past 50 years, it is not bad investment. If I do not buy a house right now, I most likely will leave my fund in stock market. Kinds of worrying about big stock market correction next year.


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## pearl (Mar 5, 2015)

marina628 said:


> Too bad you did not ask for advise before you bought it because there are many good places in GTA where you can do well with that budget .


Thanks Marina. I was only looking around in my area, such as Markham, Richmond Hill.


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## pearl (Mar 5, 2015)

marina628 said:


> I don't know your home details but check realtor.ca ,my friend rents top part for $3500 plus and lives in basement of hers.Then again $900,000 today may only buy a townhouse lol .


It is a townhouse. I expect $2700 rent a month.


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## themortgageguy (Jun 28, 2012)

pearl said:


> Thanks Marina. I was only looking around in my area, such as Markham, Richmond Hill.



I'm in Markham and townhouses are killing it right now


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