The HST Rebate Question You Should Be Asking Builders

I've seen an increase in the number of new home purchases coming across my desk.

This means I'm spending more time reviewing New Home Agreements. So I made a video about them, earlier this week.

There's an issue I keep running into with clients that's worth a conversation:

How the Builder is Applying the HST Rebate on Closing.

And right now, the answer to that question varies across builders.

Here's what I'm seeing come across my desk...

Some builders are still using the old format: they apply the $24,000 HST rebate (the old maximum) upfront at closing, and the purchaser then applies for the balance of their rebate after closing.

That's the traditional approach. It's familiar, and required no changes to their Agreements of Purchase and Sale.

Others have added addendums that change things entirely. Some are now structuring the agreement so that no HST rebate is applied upfront at closing at all, meaning the client pays the full HST and then applies for the rebate afterward on their own.

It's a significant difference in how much money the client needs to bring to the table on closing day.

And I've heard of some builders who are moving in the other direction applying the larger rebates upfront, but I haven't seen one of those agreements come across my desk yet.

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In other words, the purchase price in a new home agreement is never the whole story.

How the builder is treating the HST rebate directly affects what your client actually needs to bring in on closing day.

Two clients buying comparably priced new homes could have meaningfully different closing fund requirements depending entirely on how their builder has structured this.

So when you're working with a client on a new home purchase, it's worth asking the builder's rep early how they are applying rebates right now.

That one question gives your client the information they need to actually plan their closing.

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