The New Residential Rental Property Rebate
The New Residential Rental Property Rebate You are entitled for the new residential rental property rebate (NRRPR) if you bought a newly constructed home or condo as an investment property and have a tenant who has signed a lease for at least one year. Notably, when you purchase a new residential property to rent out, the condo or home developer is not allowed to apply for the new home HST rebate on your behalf, as they would if it were your primary residence. As a result, buyers are forced to pay the HST for the rental property up front and then must wait for the Canada Revenue Agency (CRA) to issue a refund. This often places a temporary financial burden on the individual purchasing the investment property because they will be out a considerable amount of money for up to a year and will have to endure any interest costs in the interim. It is strongly advised that you file your HST rental refund application as soon as you close on the property and find a tenant to reduce the amount of money you spend servicing this additional debt. HST Rebate for Primary Residences vs. Rental Properties If you are purchasing a home to live in or for a close relative to live in, the seller will usually reduce the final selling price, including HST, by the sum of the new housing rebate in return for full access to your rebate when it is released by the CRA. Not only does this make it easier for the buyer to afford the property because the selling price is lower, but it also saves them the time and effort of applying for the new home refund themselves since the seller takes care of it. This also enables condo and home builders in Ontario to advertise a lower “sticker price” for their new developments. When looking for new real estate, you will notice that many of the advertised prices already include the HST rebate for new homes. Notably, however, sellers are only allowed to do this for buyers who are purchasing a primary home. This means that all other buyers, including those buying a rental property, must pay the HST in full up front, resulting in a selling price that is higher than what is usually advertised. Fortunately, in Ontario, there is a special HST rebate intended to ensure that investors do not pay more for a new home than they would if it were to be occupied by the owner. The NRRPR is a HST rebate for rental properties provided by the CRA, and it is available to any landlord who purchases a new home or condo of which the first occupant is a tenant. The main difference between the rental property rebate and the regular HST new house rebate is that the buyer must pay all of the HST upfront and can only apply for it themselves, rather than the seller “fronting” the reimbursement to reduce the purchase price and then handling the application for you. Since most property owners who are interested in applying for the NRRPR are not tax […]
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Construction Lien
What is a Construction Lien? A construction lien is a security interest on a property that can be registered on title to the property by anyone who has supplied work or material to improve the property. The lien on the improved property is for the outstanding price owed for the services or materials provided. Registrants are typically builders, contractor, construction sub-contractor and suppliers. Under Ontario’s Construction Act, a lien first arises and takes effect when a party first supplies services or material to the improvement. The party paying for the services is entitled to holdback or retain 10% of the price of the services or materials until all liens that may be claimed against the holdback have expired, satisfied, or been discharged. Since 2018, there have been changes with respect to the time line for preserving and perfecting a lien. Preserving a Lien A lien can be preserved during the supplying of service or material or at any time before it expires, by registering the lien in the proper land registry office on the title of the premises. Any number of persons having liens upon the same premises can bring forward a joint claim for a lien. A party who wishes to preserve a lien will have 60 days to do so starting from the date that a certificate of declaration of the substantial performance of the contract is published, or the date on which the contract is completed, abandoned or terminated. Perfecting a Lien After an individual preserves a lien, they can then perfect it. However it is important to note that the claiming party will only have 90 days to perfect a lien, after it has been preserved. Among other considerations generally, in order to perfect a lien, the claimant must commence an action to enforce the lien and then register a certificate of action in the prescribed form on the title of the premises. A perfected lien will expire immediately after the second anniversary of the commencement of the action that perfected that lien, with the exception of an order for a trial in which the lien may be enforced. Time Limitation Suspension during COVID-19 The province of Ontario issued the Emergency Management and Civil Protection Act on April 9, 2020, which put a hold on limitation and procedural time periods that are retroactive to March 16, 2020. The Attorney General however, lifted the suspension of limitation periods for construction liens, effective as of April 16, 2020. This means that amount of time a lien claimant had to preserve a lien prior to March 16, 2020, will resume on April 16, 2020. Therefore, if a lien was established on March 16, 2020, the claimant would have 60 days from April 16, 2020 to preserve it. Have you provided services or materials for improvement of a property for which you have not been paid? If so, contact our Toronto Real Estate and Civil Litigation Lawyer for a free consultation, to discuss how you can protect your interest by registering a line. Disclaimer: The information in this article is provided as general introductory information and shall not be […]
Read moreBuying A Real Estate Property
There are many steps involved with a buying a home. Whether arranging for financing or obtaining clear title, it is important to work with a diligent lawyer who understands how to protect your rights and interests. Our Toronto Real Estate Lawyer is here to make sure your moving day is stress free. Contact us to learn more about our residential real estate services.
Read moreSelling a Real Estate Property
We are here to protect your investment and simplify the complex steps involved with selling a property. From arranging for payout statements and removing liens, we provide the care and support you need to ensure the successful completion of your sale. Contact us for more information on how we can support you with the sale of your home.
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