If you are thinking about a home renovation, you may be wondering if you qualify for a GST rebate. The first thing you need to know about this tax credit is that it is applicable only to projects that are done on your own home. You must submit all required documents for the rebate within two years after the completion of your renovation project. These documents are different from those you would submit when purchasing a new home.
A substantial renovation is a complete renovation that changes the structure of a building. It involves replacing or removing the prior structure and constructing a new one. Once completed, a substantially renovated building is considered a new house for GST/HST purposes. The rules for reselling a substantially renovated building are similar to those that apply to newly constructed buildings.
A substantial renovation can include replacing or removing most of the building’s structural elements, such as the roof and walls. It may also include general repairs, including painting. It may not include sanding or removing a hardwood floor, which would be considered minor renovation.
Not all types of residential construction are eligible for substantial renovations. For example, a building that contains more than two residential units would not qualify. One exception to this rule would be a home that is partly used to provide short-term accommodation, such as a bed and breakfast. In this case, a new housing rebate would be available for the owner of the second unit.
A substantial renovation must involve a substantial improvement to a home or apartment building. However, not all renovations are eligible for the new housing rebate. For example, a home that has three units may qualify for a new housing rebate, but only one of them has been substantially renovated.
The GST/HST Technical Information Bulletin B-092 is a good resource for determining if a renovation qualifies for the NHR. The bulletin outlines the conditions that must be met for a home to qualify for the NHR rebate. Regardless of the reason for the renovation, it is necessary to claim the rebate within two years after it is completed.
The Multigenerational Home Renovation Tax Credit would provide recognition of eligible expenses for renovations that create a secondary dwelling unit for a qualifying relative. The credit would be equal to 15% of eligible expenses, up to a maximum of $50,000. Seniors and disabled people would also be eligible for this credit.
Requirements for rebate
If you are planning on completing a substantial renovation on your home, you will need to determine if the renovation is eligible for the GST/HST New Housing Rebate. You must do this within two years after completing the work. The GST/HST New Housing Rebate guide contains details about the time frames for claiming this rebate. In general, the rebate is worth $16,080 to $24,000. It is much larger for those who paid HST when buying their home.
There are several requirements that you must meet in order to qualify for this rebate. First, you need to be the primary owner of the renovated house. Second, the renovation must be a complete overhaul of the home. This means that all exterior and interior parts of the property must be replaced.
In addition, you must own the land on which your home is located. This is true for most single-family owners. However, there are some exceptions to this rule. Those who rent their property or own it under a long-term lease can also qualify. Mobile homes and co-operative units may be important as well. Second homes and vacation properties are not eligible for the rebate, because they are not considered primary residences.
Another factor to consider is the type of construction that will be done on the property. If the building is a multiple-unit building, it must have two or more residential units. Apartment buildings, condominium complexes, and other buildings with many units are considered multiple-unit buildings. A single-unit residential complex, on the other hand, is a single-family dwelling, such as a detached house or duplex, held under a single title.
Substantial renovation can only be considered as such if the entire building or at least 90 percent of it is renovated. This means that most of the existing structure, except the foundation and interior supporting walls, must be removed and replaced. This includes the floors, roof, and staircases.
The government has committed to adjusting these thresholds to make it more equitable for people to benefit from this rebate. However, almost all new homes are still not eligible for the rebate.
Depending on your circumstances, a substantial renovation could mean rearranging the interior of a building. The interior of a building includes its interior and exterior walls. It can also include the roof, floors, and staircases. The renovation must be for the purpose of improving the property. Renovations must include more than 90% of the original structure. Some examples of such improvements are a new door, a new floor, or the installation of a new roof.
In BC, a residential complex that has been substantially renovated will generally be subject to the same GST/HST treatment as a newly constructed complex. In addition, these renovations are eligible for the new housing rebate, if applicable. To qualify for the new housing rebate, a substantial renovation must involve major changes to the property. In BC, a substantial renovation means that all or substantially all of the prior building was removed or replaced prior to renovation.
While renovations are common in older homes, the CRA recognizes them as “substantially renovated” properties and give them the same tax treatment as newly constructed houses. However, a substantial renovation is subject to the GST, which must be paid to the government by the buyer or seller of the property.
For more information, contact the Lawson Lundell Real Estate Group. They will be able to provide you with additional information regarding SVT and the taxable regions of British Columbia. They can also provide a comprehensive list of taxable areas in the province. This will help you make an informed decision about whether to make major changes to your property.
If you have two or more units, it would be considered a separate residential complex. However, you may be able to claim the new housing rebate if you are the individual owner of one of these units. If you own a condominium, you may also be able to claim the rebate for the individual unit you bought.
There are specific rules for self-supplying construction work for substantial renovations in BC. You can use this exemption to reduce your taxes on the construction work. If you are not registered to receive a self-supply tax rebate, you can file a rebate application for the costs of the construction. The rebate can cover all or part of the cost of the construction. You must file your application within two years of the self-supply date to qualify for the rebate.
The self-supply rules apply only to residential complexes that are not individual residences. An exception to the self-supply rules would be a builder who occupies the residential complex as his or her residence. To qualify for the exemption, the builder must use the property at least 50% of the time. This also applies to a former spouse, common-law partner, or former spouse.
This exemption is not available to individuals who are not builders. This is an unfair tax advantage for non-builders, and would only be beneficial if they were builders by trade. Nevertheless, the self-supply rules would still be beneficial for those who are building homes as a business, and would enjoy the advantage of being able to claim input tax credits on their commercial expenses.
If you are planning to make substantial renovations to a residential complex, you should consider whether it is a substantial renovation. In BC, the rule applies to residential complexes that contain one or more units and common areas. The renovation is considered a substantial renovation if it involves replacing the entire structure, foundation, interior supporting walls, floors, roof, or stairwell.
The self-supply rules do not apply to construction and renovation work carried out for a religious institution. Religious communities can carry out the construction work for their purposes, although they are not eligible to claim ITCs on construction costs. The rule also does not apply to communal organizations, such as religious communities.
The rules are complex and must be understood fully. Consult an experienced advisor for advice. If you are planning to undertake substantial renovations in your home, it is important to know what the rules are and how to apply them to your situation.
Among many other things, David A. Grantham is a contributing author to UmassExtension West Vancouver Blo. He is a renowned expert on real estate in BC.
Born in North Vancouver, Louisiana, Dr. Grantham grew up in Lower Lonsdale. He then went on to complete his business degree at the University British Columbia. As of this writing, Grantham has completed over 100 projects, including the development of a high rise building in Vancouver.
He is a husband, father, son, brother, and friend. He was a dedicated outdoorsman and enjoyed sports such as hunting, fishing, scuba diving, and snow skiing. His wife, Alison Grantham, and their two daughters survived him. He is survived by his wife Alison Martin Grantham and two daughters.