First time home buyer GST/HST rebate
By now, most current and near future buyers are aware of this new rebate. People are rightfully excited about it. However, unless buyers get smarter the vast majority of them aren’t going to see a penny of it while the builders will profit immensely.
Builders have been using HST inclusive pricing since 2010 when GST became HST and these rebates were created. The builders/developers have deep pockets which means they can afford the best accountants and lawyers out there. They are extremely clever and intelligent so were able to devise the all inclusive pricing model.
Here is how it works in a nutshell. A buyer signs a purchase and sales agreement that says “the purchase price is inclusive of HST net of rebate if applicable.” This one sentence allowed the builder to take the buyers rebate, if applicable, without giving the buyer anything in return. A rebate that has always been legally and rightfully to be given to the purchaser. The builder is getting the same final sale price from a purchase that is eligible for the rebate as they are from someone who is not because the inclusive of tax, net of rebate allows them to work backwards and change the numbers to add to the same end price. Example:
Builder is selling a new home for $575,000 all inclusive. Buyer 1 is not eligible for rebate.
Price before tax - $508,849.56
Hst on sale - $66,150.44
Total - $575,000.00
Buyer 2 is eligible for the $24,000 provincial rebate
Price before tax - $530,088.50
HST on sale - $68,911.50
HST rebate - ($24,000.00)
Total - $575,000.00
As you can see from the calculations above, the builders have found a way to make it appear as though the purchaser got the rebate, but they didn’t because they paid the same and an ineligible buyer.
Now imagine the same example as above but with the new enhanced rebates. The builders are getting even more free money while the purchaser gets no benefit.
These rebates rightfully belong to the purchases not the builder but the builders are clever and found a way to take the benefit for themselves.
There is a way however, to take that ability away from them to do this so the buyer receives what they are entitled to. It’s extremely simple to do so why haven’t realtors and accountants etc stepped up and helped buyers through the process of filing a type 2 rebate instead of a 1A??
If you are a buyer and you want to actually receive your rebate rather than giving it to the builder, get in touch and I will show you how. Take your rebate for yourself. It belongs to you after all.