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Legal Matters: Can spouses each get HST rebates on a primary residence?

Real estate lawyer Jeffrey Cowan advises a married couple on whether a matrimonial home is eligible for HST rebate.

In the eyes of the CRA, married couples can only have one primary residence —which means only one party gets to claim the rebate.

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In the eyes of the CRA, married couples can only have one primary residence —which means only one party gets to claim the rebate.

Q: I am about to purchase a new condo that I want to go into my name, and I have qualified for the mortgage as if it were my primary residence. Four years ago, my wife purchased another condo which she claimed as her primary residence. I went to our lawyer’s office to sign all the documents and when I stated that it will be my primary residence, she said that if I am legally married, you can only have one primary residence for tax purposes. I was claiming it as a primary residence so I would be eligible for the HST rebate. Now I am not sure what to do.

A: Your lawyer is correct; although there are two separate issues here. In the eyes of Canada Revenue Agency, a married couple can only have one primary residence (this includes recently-separated couples). So, you cannot claim the HST rebate on your new condo because it does not qualify as a primary residence (unless your wife switches her primary residence).

However, another way you may still be able to obtain the HST rebate on a new home is if you have one of your close family members move into the unit. This would mean it would still qualify under the rebate program. The only issue left is that the bank would have to be satisfied that although you are not buying it to live in, you will still be responsible for the mortgage and you still qualify for the financing. This may be a problem and you should speak to your banker about the rules around financing and residency.

Jeffrey Cowan is a real estate lawyer and can be reached at jeff@cowanlaw.ca.

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