CRA Auditing GST/HST New Housing/Rental Property Rebates

The Canada Revenue Agency  continues to audit new home purchasers for GST/HST new housing rebates and rental property rebates. In provinces like Ontario which has an HST, the amount of the rebates can be significant – up to $30,300. Each rebate has very specific requirements which are sometimes interpreted harshly by the CRA. In an earlier article published by the Canadian Tax Foundation, Simon Thang explains in detail a common issue which arises when home buyers sign closing documents without carefully reading the GST/HST new housing rebate declaration. If the home is actually used as a rental property, they may find themselves in a difficult situation. It is an unfortunate “gotcha” situation for individual or smaller investors who are unaware/were not advised properly of the rules. Acting fast is key because there is a two-year limitation period to fix the problem.

Simon Thang, LL.B, LL.M (Taxation) is Toronto tax lawyer practising exclusively in the areas of sales tax (GST/HST, PST), and customs and trade. He is the principal of Thang Tax Law.