(This post will only be of interest to readers who have built a new home in Canada or substantially renovated an existing home to make it look as though it was a new build, or will be building one soon.)
I love this community I live in!
On a newcomers’ hike in February or March of this year, one of my fellow hikers mentioned how she and her husband were planning to use their GST/HST rebate to do some landscaping. They had recently had their earth-sheltered home built, but are not in the business of building homes. This is a photo of the roof of their house:
I said, “How do you qualify for an HST rebate, as the homeowner-builder?”
She and her husband said, “Our contractor told us about this GST/HST rebate. You apply for it from the Canada Revenue Agency (CRA). A few months after we applied, our cheque for $28,000 arrived.”
How is it I have never heard of this rebate????? Contractors can apply for a GST refund on all their expenses, and they must also collect G/HST from their customers on their labour and materials, and submit it to CRA. But, I’m not a business, just a homeowner-builder who acted as general contractor and my partner and I did much of the hands-on work.
Way back here, I complained about the dearth of incentives to build green, or build your own new home, period.
So, with my new friend’s advice, I downloaded the forms for British Columbia. The other provinces/territories have different forms. If you are in a different province, go to the CRA website, and poke around for the appropriate rebate application.
The “catch” is that you need to complete the applications and submit by mail so that the CRA receives it within two years of “substantial completion (90%)” of the home.
Even though I did not learn that such a rebate existed until February or March 2013, I deemed that our home was 90% completed by October 2011, which is when we obtained our occupancy permit. It was well within the two-year deadline. (It probably was closer to 80% completed, but it seemed obvious to me that we qualified.)
Reading the rebate schedule given, with our set of circumstances, we would qualify for a rebate of $17,588. The effort would be well worth my time.
First, I sorted all our invoices and receipts into the 44 categories the form listed. (Some examples: Excavation and backfill; Lighting fixtures; Irrigation; Trees, Shrubs and Gravel; Eavestrough; Ceramic Tile; Trim Carpentry; Window and Doors.)
You need to develop your own spreadsheet, and type out all the headings: Category no., Description of goods and services, Vendor’s name, Vendor’s Business G/HST number, Invoice date, Invoice number, whether it’s for Labour or Materials, the Invoice amount, the GST paid at 5% or the HST paid at 12%. Each category lists all the appropriate figures.
Then, you need to identify and list every invoice according to these headings. I put all my invoices for our framers (for example) together on one line for each category, but still needed to complete 146 lines. Not only did the sorting and identification require hours and hours, but I often had to contact the vendors to find out their GST number or invoice number. Then transcribe all these numbers accurately into the spreadsheet.
Then you have to add up the totals for each category, and complete the other parts of the application form.
After I submitted the form in April, I waited 5 months before following up on its status, by phone. The agent shared with me that we would only qualify for the lowest rebate amount of $5572, but that it had to go through the auditor first, who would let me know in due course. I was disappointed in the amount, which, if I had read the form a little more thoroughly, I would have realized before sending the application. Nevertheless, I thought our $5572 rebate would still be worth all my effort.
The auditor phoned a couple of weeks ago, and I spent approximately 25 minutes answering her questions about my application. It seems she believed it was substantially completed one year earlier than I claimed. She only looked at the invoice dates, and since our framers had wrapped up their work here, and we were doing the finishing ourselves, there were few invoices for labour. Add to that the fact that we bought many of our building materials second-hand so there were no invoices, and the fact that we purchased many of our materials, such as the stone facing, very early in the construction process so we could work on it at our own pace.
No one looking at either the inside or the outside of the house would think it was 90% completed in October 2010, one year from when we started. Granted, we were past lock-up, but we only got the heating completed and the stove hooked up in October, and had our first sleep in our bed in December. There was a functioning toilet. The exterior finish was approximately 70% completed by October 2011, a full year after she deemed it substantially completed, with all the stone facing and 1/4 of the shingle cladding still not done. The yard and driveway was still mud and weeds. If the landscaping and driveway did not count in the definition of “substantial completion,” why were they included as categories on the forms? The following photos were all taken near or after the October 2011 date I considered the house completed for the purposes of the application, a full year after she claimed it was completed.
The upshot of her audit is that our application was denied. Her definition of “substantially completed” seemed to be “could we live there?” Well, yes, we could camp here and stay dry, but it certainly wasn’t 90% completed. The application is for an owner-built home. I think it’s reasonable to assume that when an owner builds a home, including the hands-on finishing, it’s going to take a lot longer than when a contractor builds a home for a customer, which might be a year from start to finish.
So, I am incredibly frustrated with the process and the result. (It’s more accurate to say “I’m credibly frustrated.”) I’m recounting it here so that anyone doing research on grants and rebates may learn that you can apply for this rebate, but you must do it early.
I’ve said from the start that I write this blog for people like me who are building a green home (or any type of home – CRA certainly doesn’t care whether it’s green.) I wish there had been such a blog to help us with this process.
AND, I will recommend to the building department of our municipality that they include this rebate possibility in the information they provide when people apply for a building permit. Unfortunately, I cannot do that for every municipality in Canada. I hope I can help some of my readers reclaim several thousands of dollars with this information, even though my attempt failed.