My question is: Canadian-specific
QUESTION: Dear David,
I bought a pre-construction condo in New Westminster, BC. I plan to rent it
upon completion. My developer told me that I will get a full rebate of 7%
GST if I have a signed 1-year lease with my new tenants. Please confirm if
that's true or not.
My understanding is that the Developer will "discount" price by 4.65%. I pay
full 7% GST on closing. Then the government will send me a rebate of 2.35%.
I'm a bit off with the exact %. please let me know if I get the picture
right or if I'm mistaken.
Thank you,
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david ingram replies:
I do NOT consider myself a GST expert but believe your builder has it
backwards. If it was being rented as a commercial rental or as a hotel room
rented by the night (as in a Whistler hotel/condo deal) you would be
entitled to an input credit of the 7% GST.
However, if it is to be rented as a residential place on a month to month
basis or for a whole year, you must pay the full 7% and are not entitled to
the rebate.
The rebate is only available if you or a relative will be the first
occupier. You can read more at
http://www.cra-arc.gc.ca/tax/individuals/topics/gst-hst-rebate/substantially
-e.html
Now, I could be wrong but I do not think so.
Hope this helps
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