One of the main ways the Canadian Government regulates the economy and influences investment decisions is through taxation policies. The goods and services tax, also known as the Harmonized Sales Tax (HST) must be paid for after you buy substantially renovated or new residential property from the builder. The New Residential Rental Property Rebate (NRRPR) was introduced by Canada Revenue Agency (CRA) to allow landlords and owners of the brand new rental property to claim some federal percentage of the amount of HST from the government. This move was made to encourage the development of new residential properties to meet the growing housing demand in Canada.
A residential property qualifies for the NRRPR if:
You built the new residential property to lease the property as opposed to living in the property yourself. The term “builder” does not necessarily mean the one who physically constructs the house. The Builder is the actual owner of the property who may also hire a contractor to build for him. The new residential unit may be a new building, a renovation, or extension of an existing building constructed with the intention of leasing it out.
You paid fully the HST/GST after buying new or heavily renovated residential housing unit in a residential building.
You are the residential unit builder who accounted for HST/GST on self supply of a residential unit or paid to have an extension of your residential complex for leasing out to other people for residential use.
You buy a house before construction, or heavy renovation works are complete or during construction with the intention to lease out to a tenant when construction works are complete.
If you buy a house when construction is complete but nobody is yet to live inside it. The main purpose for buying the house should be to sell it or lease it to someone who does not use it for his personal use but also leases it out.
You are cooperative Housing Corporation that paid for the HST/GST on self supply of a residential unit or had an extension of the property for rental purposes.
You are a coop and you paid the GST/HST after you bought a newly constructed or heavily renovated complex from the builder and proceed to lease units to tenants for long term use.
How to Apply for the NRRPR
The good news is if your property qualifies, you are just a few steps away from getting that HST rebate. The application has to be made within two years failure to which you forego the rebate. All applicants are required to fill a number of forms like the GST524 (GST/HST NRRPR Application form) or the GST525 depending on your unique situation. All the eligible claimants are required to fill Section A, section B, section C and section F regardless of the type of application made. These sections contain important information like the details of the claimant, the property details, and the rebate calculation. While making the application, all the appropriate documents required for every type of application have to be submitted. To expedite the process, applicants are advised to fill in all details correctly and provide all required documents.