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GST REBATE FOR RESIDENTIAL REAL ESTATE
PRICED BETWEEN $350,000.00 AND $450,000.00

Goods and Services Tax ("G.S.T.") is payable on the purchase of a new home. The G.S.T. is equal to 7%, however, a rebate is available in certain cases.

For homes with a fair market value of under $350,000.00, a rebate is available of 36% of the G.S.T. For example, if the fair market value is $300,000.00, the gross G.S.T. would be $21,000.00 (7% of $300,000.00). The rebate would then be $7,560.00 (36% of $21,000.00). Thus the net G.S.T. would be $13,440.00 ($21,000.00 less $7,560.00).

For homes with a fair market value of $450,000.00 or more, no rebate is available. G.S.T. in the amount of 7% is payable on the entire purchase price.

For homes valued between $350,000.00 and $450,000.00, the rebate is gradually reduced and is calculated by using the following formula:

A X ($450,000.00 - B) / $100,000.00
"A" is the lower of $8,750.00 or 36% of the G.S.T. and "B" is the greater of $350,000.00 or the fair market value of the home. For example, assume the value of the home is $400,000.00. The rebate would equal:

$8,750.00 X ($450,000.00 - $400,000.00) / $100,000.00 = $4,375.00
Using this example, the G.S.T. payable would be $28,000.00 (7% of $400,000.00) less $4,375.00 which would equal $23,625.00.

Note that this rebate is only available to individuals and a company is not eligible for this rebate.

Please remember that the rules regarding G.S.T. frequently change. While we try to keep our website up to date as much as possible, please do not rely upon the information without talking a solicitor.

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