Buying or building a new construction home in Canada is a big milestone, but it often comes with an equally big tax bill. Fortunately, there’s a little-known rebate that could help put thousands of dollars back in your pocket: the GST/HST New Housing Rebate.
If you’re wondering how much you can save, who qualifies, or how to avoid paying more HST than you should, keep reading. As a mortgage broker based in Halifax, Nova Scotia, I work with clients across Canada every day to make the most of the programs like this one.
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What Is the GST/HST New Housing Rebate?
The GST/HST New Housing Rebate is like a financial pat on the back from the government for taking the leap into homeownership. It’s designed to help first-time homebuyers recover a portion of the GST or HST paid on the purchase of a new or substantially renovated home. This rebate can apply to buying a new home, building one, or undertaking major renovations on an existing home.
How Much Can You Save with the GST/HST New Housing Rebate?
The federal structure for the GST/HST New Housing Rebate has recently changed.
Here’s how the updated federal portion works:
- 100% of the federal GST portion on new homes priced up to $1,000,000
- Phases out between $1,000,000 and $1,500,000
- No federal rebate available above $1,500,000
- Maximum federal rebate is approximately $50,000
This applies to qualifying new construction homes purchased from a builder.
| Home Purchase Price | Federal GST Rebate |
|---|---|
| Under $1,000,000 | 100% of federal portion |
| $1,000,000 – $1,500,000 | Gradually reduced |
| Over $1,500,000 | No federal rebate |
Who Is Eligible for the GST New Housing Rebate in Canada?
Not every buyer qualifies. Here’s who is eligible:
- You bought or built a new home (includes condos, mobile homes, and substantial renovations).
- The home is intended to be your primary place of residence (or a close relative’s).
- You are an individual, not a corporation or business.
- The home is located in Canada.
- You paid GST or HST on the purchase or construction.
For first-time home buyers, eligibility may include:
- Never having owned a home before
- Not having owned a home in the last 4 years
- Certain exceptions may apply in cases of marital or relationship breakdown
If you’re purchasing the home as a rental or investment property, there’s a different rebate available called the GST/HST New Residential Rental Property Rebate.
Important Details & Limitations of the GST/HST Rebate
Important Note: This updated rebate structure is still in the final stages of the legislative process. While it is currently being administered as if approved, it remains subject to full legislative confirmation. Always confirm eligibility at the time of closing.
While the rebate is a fantastic way to save, there are a few catches:
- Home price limit: No federal rebate if the home costs more than $450,000. For First Time Home Buyers, the FTHB GST/HST rebate will be 100% of the federal part for homes valued up to $1.5 Million.
- Time-sensitive: You must apply within 2 years of closing or occupancy.
- Renovation rule: If you’re claiming for a renovated home, 90% or more of the interior must be rebuilt.
- Use of the home: It must be used as your or a close relative’s primary residence, not just a vacation or rental unit.
How to Apply for the GST/HST New Housing Rebate
The CRA has made it relatively straightforward to apply, just be sure to use the correct form.
Step-by-Step Application Process:
- Purchased from a builder? Use Form GST190
- If you are building your own home, the tax treatment may be different. In many cases, owner-builders are not charged HST the same way as purchasing from a builder. The rebate structure may not apply in the same way, so it’s important to confirm how HST is being handled before assuming eligibility.
- If you are building your own home, the tax treatment may be different. In many cases, owner-builders are not charged HST the same way as purchasing from a builder. The rebate structure may not apply in the same way, so it’s important to confirm how HST is being handled before assuming eligibility.
- Built or renovated your own home? Use Form GST191
- Include:
- Proof of payment of GST/HST (e.g., builder’s invoice or closing statement)
- Proof of ownership (title, purchase agreement)
- Proof of occupancy (utility bill, driver’s license address)
- Proof of payment of GST/HST (e.g., builder’s invoice or closing statement)
- Submit the form:
- By mail to the CRA (address is listed on the form)
- Or submit through your CRA MyAccount if available
- By mail to the CRA (address is listed on the form)
How a Mortgage Broker Can Help Maximize This Rebate
As a mortgage broker, I help you look at the full financial picture, and that includes making sure you don’t leave money on the table.
Here’s how I help:
- Ensure eligibility is considered in your pre-approval or financing plan.
- Reduce upfront costs by estimating your rebate in advance.
- Builder agreements that may or may not include the rebate in the home price.
- Coordinate with lawyers and accountants for more complex transactions.
How to Avoid Paying More HST on New Homes Than You Should
It’s not always possible to “avoid” HST on a new home, but many Canadians end up overpaying because they miss important rebate steps. Here are a few ways to protect your wallet:
- Make sure you qualify before closing on your home. Start your application here
- If buying from a builder, ask: “Is the rebate already factored into the price?”
- Gather documentation right away. Waiting can delay or disqualify your application.
- Work with a mortgage broker or accountant who understands the rebate structure.
- Ask questions. The CRA provides support, and so does professionals like me.
Common Mistakes Canadians Make When Claiming the Rebate
Here are the top errors I see clients make:
- Missing the 2-year deadline
- Not occupying the home as a primary residence
- Filing the wrong CRA form
- Failing to include GST/HST payment receipts
- Assuming the builder’s rebate includes everything
It’s always worth double-checking with a professional. If you make a mistake, you may have to repay the rebate or miss out entirely.
GST/HST Rebate vs First-Time Home Buyer Tax Credit
Many Canadians confuse the GST/HST New Housing Rebate with the First-Time Home Buyer Tax Credit.
They are not the same.
The First-Time Home Buyer Tax Credit applies to resale homes and is claimed when filing your income taxes.
The GST/HST New Housing Rebate applies specifically to new construction or substantially renovated homes and is tied directly to the GST or HST paid on the purchase.
In some cases, buyers may qualify for both programs, depending on their situation.
Ready to Claim Your Rebate?
The GST/HST New Housing Rebate is a helpful tool to alleviate some of the financial pressures of buying or renovating a home. If you’re feeling a bit unsure about how to navigate this rebate or how it fits into your overall home-buying budget, I’m here to help.
Contact me, and let’s make sure you’re getting every financial advantage you’re entitled to as a new homeowner.
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Frequently Asked Questions
Can I claim the GST rebate on a condo?
Yes, as long as the condo is your primary residence, you can apply for the rebate.
Is the rebate automatic?
No. You must submit the correct CRA forms. Builders may deduct the rebate from the sale price, but it’s still your responsibility to ensure eligibility.
What if I sell the home shortly after buying it?
If you don’t live in the home, or sell it too soon, the CRA may claw back the rebate.
Can I still qualify if I rent out part of the home?
Yes, if you still live in it as your primary residence, you may qualify for a partial rebate.
Do all provinces offer an HST rebate?
Provincial rebates vary. Some provinces may offer a rebate on the provincial portion of HST, while others may not. Always confirm provincial eligibility based on where the home is located.