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HST Rebate Loans and Unexpected Investment Condominium Closing Costs

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Things to Consider for an Investment Condominium Closing

Are you one of the many investors purchasing new build condominiums as an investment property? If so, there are some things to keep in mind to ensure that the final closing goes smoothly. One would think that the process of purchasing a new build condominium or house for investment purposes would be very similar to purchasing the same property as a primary residence. In reality, the process of purchasing and closing an investment property can carry additional upfront costs, which can take many investors by surprise and potentially threaten the final closing.
Investors should be especially aware of the HST prior to the final closing. The main difference between the costs associated with purchasing a property as a primary residence and purchasing the same property as an investment property will be who is responsible for paying the portion of the HST that is due on final closing. When the property will not be owner-occupied, the investor is responsible for paying the HST in full (with the portion due on closing typically ranging from $16,000 - $29,000, referred to as the Rebate portion of the HST) on the final closing date.
The investor may be eligible to file a claim for an HST New Housing Rebate with the Canadian Revenue Agency to recover the amount paid for HST, but the claim can’t be filed until after the final closing date. Even with a successful HST rebate claim, it can take many weeks (even months) to receive the HST rebate.

Is There Financial Help Available to Cover Unexpected HST Costs?

The confusion over who is responsible for paying the HST upon final closing and the additional rules governing the HST rebate can leave investors scrambling to come up with the funds to pay the HST. Inability to pay the HST by the date of final closing can threaten the closing of the property and bring about very negative consequences. Any deposit that has been put down on the unit may be lost. In some cases, the builder may even pursue legal action to recover damages.
What options are available for investors who need to secure the additional funds to pay the HST? While there is definitely a need for these types of specific HST loans, the major banks will not provide unsecured loans for tax-related purposes, as they are mandated specifically to not do so.
There are HST relief companies available that specialize in providing HST Rebate Loans for investors closing investment properties.

How Does an HST Rebate Loan Work?

A loan is issued for the amount of the HST (up to $29,000) as long as the investor meets the necessary credit and basic income qualifications (call us for more details). In other cases, the loan may be secured as a second mortgage on the property.  The investor pays a fee for the loan and is responsible for making the small interest payments on the loan until the HST Rebate is received. Once the HST Rebate is received, it will be used to pay off the loan (as sort-of a bridge financing product). The top HST relief companies will even file the HST Rebate paperwork to help the investor get the money back.
HST relief companies provide the money necessary to deal with unexpected HST costs and ensure that your investment condominium closing goes as planned. Take advantage of these professional financing services and the additional convenience they provide today.

Is HST included in the purchase of a new house in Ontario?

I need to know if HST is included in the new house I purchased.  How do I know how much HST I will have to pay on closing?


By HST Relief (Admin)
Good question.  HST is only applied to new construction, not to resale properties.  A portion of the 13% in HST is included in the purchase agreement that you signed with the builder, and the rebate portion is due on closing.  If you are going to use the property as your primary residence, the builder will credit you the HST New Housing Rebate upon closing and you will essentially not have to pay anything.  If you will be using the property for a summer home or for a rental property, then you will be responsible to pay this portion of the HST on closing (usually expect around 7-8% of the purchase price).  
The exact calculations for the rebate portion are weighted based on your purchase price.  Please give us a call to inquire about how much HST you will owe on closing - we can answer those types of questions for you.  1.866.832.1990 or email us at info@hstrelief.ca
The services we offer are 2-fold:
  • We offer loans for the HST due on closing, it's a sort of bridge financing until after closing when we can file for your HST rebate and get the amount you paid back.  At the time the money comes back from CRA, about 45-60 days after closing, you will be able to pay off the loan.
  • We also offer a flat fee to file your HST rebate along with all supporting documentation for you with CRA.
  • Finally, we also file Substantial Home Renovation HST Rebates.  
Give us a call - 1.866.832.1990  or email us at: info@hstrelief.ca

HST when purchasing for family?

I want to buy a new unit from Tridel for my son to live in when he comes to University in Toronto.  Will I owe any HST? 


By HST Relief (Admin)
Hi Peter,
If you are purchasing a new construction condo for your son to live in, then no, you will not owe any HST on final closing.  HST is not charged on final closing when the purchaser or an immediate family member is occupying the property as a primary residence.  If you were to use the property for any other use, rent it out or if a non-immediate family member, such as a cousin or nephew, were to move in then the balance of HST would be due on closing.
Please call us if you have more questions at 1.866.832.1990

Cost of HST for my new condo in Toronto

I recently bought an investment condo in Toronto for $374,200. How can I calculate the HST I will have to pay​ and ​when will I have to pay the HST for my new condo?


By HST Relief (Admin)
Hi Jim,
Good question - How does HST work for new condos?  If you purchased a new build, preconstruction investment condo for $374,200 you are required to pay a portion of the HST to the Canadian Revenue Agency (CRA) upon final closing.  This will be approximately $27,300.  Your solicitor will ask you to bring these funds to their office just before closing, along with funds for your other closing costs, when you receive your Statement of Adjustments and Trust Ledger for the transaction. 
If you meet certain requirements, such as having a 1 year lease in place, you may be eligible to reclaim this $27,300 by filing for New Residential Rental Property Rebate.  For more information, call us at 1-866-832-1990.
Please note that if you will be using the property as your primary residence, the builder will cover the HST due on closing and the corresponding rebate will be signed over to he builder to collect. 

First Canadian Place • 100 King Street West • Suite 5700 • Toronto, ON • M5X 1C7

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