Everyone who purchases residential properties are required to pay goods and harmonized sales tax. The landlord of a residential rental property in particular has to be aware of the New Residential Rental Property Rebate. When you buy a residential property, the developer ill not allowed to demand the rebate on his behalf as were the case when the property becomes the primary place of residence. In order to address the situation, you should team up with an expert in estate law and get your refund back. To contact an expert, all you have to do is to visit http://www.rebate4u.ca. This way, you will be able to avoid debt and avoid any more financial strain.
HST applied to rental buildings
The main difference between the HST for rental property and standard homes is that the owner is required to apply for the rebate on his own, after having paid the HST upfront. It is widely considered that owners of newly constructed buildings and renovated ones have paid and collected the tax. Only those who have the residence occupied by tenants are eligible for the NRRP rebate. You will have to wait until the closing of the building and make your application within the following two years. The reason why the program is so strict is that any actually attempt to manipulate the system. The general intention of the government is to be fair to both owners and investors.
How to qualify for the NRRP rebate
Residential landlords who find themselves at a tax disadvantage have to claim the GST or the federal portion only if they meet one of the following criteria:
- The HST has been paid when you have bought a renovated residential building and the property is leased as a residential properties.
- You have either funded the GST/HST of the residential building or at least the addition to the residential building.
- You are a corporation that has funded the purchase of the residential building.
However, there are many more criteria that apply. In order to learn about all of them, you should hire a professional rebate specialist. The bottom line is that if you have paid the GST/HST rebate for any other reason, you are entitled to a rebate.
Rental property strategies
Since real estate investors are interested in what is called capitalization rate, you should generate the most of net operative income in order to make the property a good investment. The cap rate involves everything from taxes to insurance and maintenance. Therefore, when you are purchasing a new condo or house for lease, you have to pay attention to the HST since it will significantly lower the cap rate on paper. The HST rebate is a good strategy for lowering the mortgage rate and this is why you should not wait more than 2 months.
To sum up, the program for rental properties is straightforward and in order to ensure you get back your HST you should collaborate with professionals to simplify the process.