Short answer
The HST result can change depending on who buys the property, who first occupies it, whether it is a primary residence or long-term rental, and whether the builder credited a rebate in the price. Tell the lawyer and accountant the true intended use before signing and again before closing.
Why this becomes stressful
An investor sees a price advertised “including HST” and assumes no extra cash will be required. The builder’s price may assume eligibility for a particular rebate and assignment to the builder. If the actual use does not fit, the buyer may need more money on closing and apply separately if eligible.
A practical Ontario example
Illustration only: A buyer originally plans to occupy a condo, then decides to rent it when the project completes. That change can affect the rebate process and closing cash. Rajiv does not decide the tax treatment; he asks the lawyer and accountant for the amount and timing, then tests whether the mortgage and liquid funds can support it.
What to do now
Disclose the purchaser names, intended occupant, relationship, lease plan, property value, possession date and any change in intended use. Ask who files the rebate, whether the builder credits it and what cash is required if the credit is unavailable.
Keep the four decisions separate
- Builder contract: what the signed agreement permits, requires or charges.
- Legal position: rights, notices, liability and closing consequences explained by the lawyer.
- Mortgage approval: what a specific lender will accept based on current income, credit, property and value.
- Tax treatment: HST, rebate, assignment or rental consequences confirmed by an accountant or tax lawyer.
Questions Rajiv would ask first
- What did you sign, and what are the current occupancy and final closing dates?
- How much deposit has been paid and how much cash remains available?
- Will you occupy, rent, assign or sell the property?
- Has your income, employment, credit, debt or ownership changed?
- What value has the lender or appraiser supported?
- Which decision or deadline can no longer wait?
Practical routes to compare
- Confirm owner-occupied eligibility before relying on a builder credit.
- Review the rental-property rebate route and filing deadlines with an accountant.
- Budget for paying an amount first when reimbursement may come later.
- Do not misstate occupancy to preserve a rebate or mortgage classification.
Where A, alternative, MIC and private lending fit
An A lender is usually the first route when income, credit, debt ratios, property and appraisal fit its current policy. Alternative lenders may take a broader view of income and property but charge more. A MIC is an institutional mortgage lender that may offer flexible short-term, interest-only, amortized, open, partially open or maturity-matched structures. A private lender may also bridge a closing problem. Neither short-term route fixes the underlying issue by itself; compare total cost, legal fees, renewal risk and the written exit back to A or alternative lending.
Facts, lender policy and professional judgment
Verified public guidance: CRA publishes separate new-housing and new-residential-rental-property rebate rules. Eligibility depends on detailed facts, including ownership, occupancy and intended use; an accountant or tax lawyer should confirm the applicable route.
Lender policy: qualification, appraisal use, rate holds, project acceptance and permitted funding structures vary by lender and can change. Legal and tax advice: the lawyer and accountant decide how the agreement and tax rules apply. Professional judgment: Rajiv can compare mortgage paths, but approval exists only when the lender has accepted the full current file and all conditions are satisfied.
What could make the plan fail?
A later appraisal, expired documents, new debt, job change, unexplained funds, builder notice, contract restriction, tax amount, property issue or lender policy can change the answer. Keep a second route and enough time for legal and mortgage work. Do not wait until the final funding date to discover that the first assumption no longer works.
Documents to gather
- Agreement of purchase and sale, disclosure statement and every amendment
- Statement of critical dates and builder notices
- Deposit receipts and 90-day source-of-funds history
- Current income, employment, credit and debt information
- Appraisal or valuation details, if available
- Lawyer’s estimate of adjustments, taxes and closing funds
Related AskRajiv guidance
Continue with subject property rental income mortgage qualification, closing funds deadline source of money ontario.
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Source and review
Read the primary source. Source checked 2026-09-03. Reviewed by Rajiv Verma, Mortgage Broker on 2026-09-03. Educational information only; not legal, tax, appraisal, real-estate or mortgage approval advice.