Buying a newly built house - What you need to know?
What to do when buying a newly built house?
The first step in the process of becoming a homeowner is the signing of a Purchase and Sale Agreement. A real estate lawyer is a valuable resource especially when it comes to purchasing a newly built home. For example, real estate lawyers provide their clients with valuable information about their warranty rights and obligations before they sign the contract with a builder.
Do I Need to Pay HST/GST?
The short answer is “yes.” In general, HST/GST apply to the sale of all newly built or renovated houses. It is the builders’ job to charge the GST/HST on their taxable sales of new or substantially renovated houses.
Can I get an HST/GST new housing rebate?
Yes. Some buyers are eligible for a tax rebate. Under the current legislation, there are three scenarios that could make you eligible for a rebate. Specifically,
- If you use your newly built property as the primary residence for yourself or your relative.
- If you bought shares in a co-operative housing (a co-op) in order to use a unit in a new or substantially renovated cooperative housing complex as your or a relative’s primary residence; or
- If you construct or hire someone to construct a house for use as your or your relation’s primary residence, and the fair market value for the home once the construction is completed is less than CAD$ 450,000. In most instances, the first scenario would probably be the best option for getting a tax rebate for your newly built property.
For more information on GST/HST tax rebate click here.
What should I expect when buying a newly built home?
Once you are ready to buy a newly built home there are some things that you should take into consideration, including what to expect from the builder or staff. The builder should provide you with a thorough description of the entire process, including who is responsible for construction, payment milestones, closing conditions, after-sales service and warranty. The staff should also give you an idea of approximate closing costs and prepare a comprehensive written sales contract for you. Furthermore, the builder should respect your decision-making process and provide you with sufficient time to review the Purchase and Sale Agreement before signing it.
How a lawyer can help?
Ultimately, the lawyer’s job is to review a final version of the Purchase and Sale Agreement for any ambiguities, errors or omissions. Bear in mind that you will receive from the builder a package of paperwork of about 50 to 100 pages on average. It won’t be surprising that a purchaser will “drown” in this paper ocean and miss important nuances, such as whether or not an assignment of the property is allowed before closing, transfer of the property to the immediate relatives, option to rent the property in the interim occupancy, etc. Not only the lawyer can locate all those issues, but also can negotiate them as well as the closing costs reduction on your behalf. Our legal team will be glad to assist you. You can contact us via the “CONTACT US “form, telephone at