Can I Claim HST Rebate Building a Laneway House

Litman v. The King was an appeal before the Tax Court of Canada after Mr. Litman was denied the GST/HST housing rebate for a laneway house built on top of his detached garage. The GST/HST new housing rebate allows an individual to recover some of the GST or federal part of HST paid for a new or substantially renovated house for use as a primary place of residence

Eligibility requirements for the GST/HST new housing rebate:

• Purchased new or substantially renovated housing from a builder, including housing on leased land (if the lease is for at least 20 years or gives you the option to buy the land) for use as your or your relation’s primary place of residence
• Purchased shares in a co-operative housing corporation (co-op) for the purpose of using a unit in a new or substantially renovated cooperative housing complex for use as your or your relation’s primary place of residence
• Constructed or substantially renovated your own home or hired someone else to construct or substantially renovate your home for use as your or your relation’s primary place of residence, if the fair market value of the house when the construction is substantially completed is less than $450,000

Tax court decision:

The laneway house built by Mr. Litman met all necessary conditions set out in subsection 256(2) of the Tax Act and Mr. Litman was eligible to claim the new housing rebate. This case sets the precedent that laneway houses can qualify for the new housing rebate if the necessary criteria are met.

This article is intended for general information purposes only and does not constitute professional advice.  Income tax law and regulation change frequently and the content on this article may no longer reflect the current state of the law. If you have any specific questions, you should consult a professional services advisor or email us for further advice.