What you need to know about the GST/HST new housing rebate

What is the HST/GST new housing rebate?

The HST/GST new housing rebate is intended to help qualifying home buyers offset some of the cost of the GST or the federal part of the HST (in provinces that have combined the GST and HST into one tax) that they pay when they buy a home. There are a variety of  conditions that must be met in order to claim the rebate.

In general, the key condition is that it must be a new home bought directly from a builder or it must be a substantially renovated home. The reason for this is that usually, you don’t pay GST/HST when buying an owner-occupied home because the property owner is not a builder. You would, however, pay GST/HST to a builder or a contractor who renovated your home.

It’s important to note that the new housing rebate should not be confused with the GST/HST credit. The GST/HST credit is a tax-free payment that eligible families and individuals receive quarterly. It’s designed for low- and modest-income Canadians and is intended to help offset the expense of any GST or HST taxes they pay during the previous year. You don’t have to apply for the credit because you’re automatically considered for the credit based on your tax return. If you are deemed eligible, a quarterly amount will be deposited in your bank account or you’ll get the credit via cheque.

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How do you qualify for the new housing rebate?

There are a series of qualifications you must meet in order to receive the rebate. The qualifications depend on the type of housing situation:

Owner-built home requirements:

• The home is newly built and not a renovation or conversion
• The home is your’s or a relative’s primary place of residence
• You paid the GST/HST on the land, construction materials and services
• The fair market value of the home is less than $450,000 upon completion

Builder-purchased home eligibility

• The home is your’s or your relation's primary place of residence
• The builder paid the GST/HST on the sale and transferred the rebate to you
• The purchase price is less than $450,000 for a full rebate
• You have a signed purchase agreement with the builder
• The builder certifies that the home is new and not a renovation or conversion

Substantially renovated home eligibility

For a substantially renovated home to qualify, it must meet these requirements:

• The home is your’s or your relative’s primary place of residence
• At least 90% of the interior has been removed or replaced (some exceptions apply)
• You paid the GST/HST on the renovation materials and services
• The fair market value is less than $450,000 after renovations are complete

In all cases, you must be an individual (not a corporation or partnership) and the home must be located in Canada. The rebate application must be filed within two years of the home's closing date or substantial completion of renovations.

How can you claim the new housing rebate?

To claim the GST/HST new housing rebate, you have to fill out the appropriate rebate application form, which is typically Form GST190 for owner-built homes or Form GST191 for homes purchased from a builder.

You'll have to apply within two years of the home's closing date or the completion of renovations. You also need to hold on to all documents related to the rebate application for a minimum of six years because the Canada Revenue Agency may request them for verification purposes.

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Who can benefit from the GST/HST Rebate?

Anyone who builds or buys a new home or substantially renovates their home such that it’s essentially a new house (i.e. 90% or more must be renovated) can potentially benefit by saving thousands, if not tens of thousands, from the GST/HST new housing rebate.

How much is the new housing rebate?

To understand how much you could potentially get as a rebate, it’s helpful to think of the rebate as consisting of two parts: a GST portion and a provincial portion.

You can get up to 36% of the GST (or federal portion of HST) paid on the purchase price to a maximum rebate amount of $6,300 for homes valued at $350,000 or less. For homes over $350,000 and up to $449,999, the rebate is gradually reduced. It reaches zero for homes that are $450,000 or more (note that for the Ontario provincial new housing rebate portion the value of a home could be $450,000 or more).

The amount that you can receive also varies by what province you live in. If you live in Ontario, BC, Saskatchewan, Nova Scotia or Quebec, you can also claim an additional provincial tax amount (PST), which varies by province (see below).

Are there any provincial new housing rebates?

As mentioned above, there are some provinces that offer rebates on the provincial sales tax portion of a new home.

• Ontario: You can get up to $24,000 on the provincial portion of the HST, even for homes over the $450,000 federal cutoff amount
• Quebec: Offers a rebate of up to $9,975 on the provincial tax for homes up to $300,000
• Nova Scotia: Has a rebate of 18.75% of the provincial HST up to $3,000
• Saskatchewan: Provides a rebate of 42% of the PST on homes up to $450,000.
• British Columbia: Has a maximum rebate of $42,500 of the PST on homes up to $850,000

FAQs

How much HST rebate will I get on new homes in Ontario?

In Ontario, for the housing rebate, you can get up to $24,000 on the provincial portion of the HST, even for homes over the $450,000 federal cutoff amount. You’ll also be eligible to receive up to $6,300 on the federal portion of the HST for a total maximum rebate of $30,300.

What is the GST rebate on a new home in BC?

In British Columbia, the GST rebate on a new home is up to 36% of the GST paid, up to a maximum of $6,300. The province also offers an additional rebate of $42,500 of the PST on homes up to $850,000.

Is there a GST on housing?

Normally if you buy a home directly from an owner you do not pay any GST. However if you buy a new home or condo from a builder you do have to pay the federal goods and services tax (GST) or the harmonized sales tax (HST) in participating provinces on the amount you pay for the property.

What is the new house tax in Canada?

Canada has a new housing rebate, known as the GST/HST new housing rebate. It gives qualifying Canadians up to $6,300 rebate on the federal tax portion of an eligible home purchase or major renovation. Some provinces are also eligible for an additional rebate amount.