GST/HST Rebate on Buying New Homes in Canada
The GST/HST New Housing Rebate
When you purchase newly built or heavily renovated housing, you would have to pay a sales tax on top of the purchase price which consists of a federal portion and a provincial portion that in some provinces are kept separate while in others are combined to be called the Harmonized Sales Tax (HST). The GST/HST new housing rebate allows you to take back some of the federal portion of the tax also known as the Goods and Services tax (GST), and in select provinces there may also be rebates for the provincial part of the tax.
The amount of federal rebate you can receive for the GST Portion is 36% of the GST tax amount up to a maximum of $6,300, and disappears entirely once the home price exceeds $450,000.
Eligibility for the GST/HST New Housing Rebate
Depending on your conditions and province, you may be eligible for both the provincial and federal rebate, only the provincial rebate, or only the federal rebate. In general, you may be eligible for the rebate if any of the following applies:
- You purchased newly constructed or heavily renovated housing for residential purposes that stands on purchased land or land that will be leased for more than 20 years
- You purchased co-operative housing complex shares for residential purchases
- You have heavily renovated your home (meaning more than 90% of the interior must have been removed or replaced)
On top of standard types of housing, the rebate is also available for mobile homes and floating homes that are used for primary residential purposes. The rebate is not available for corporations or partnerships.
The property purchase price without tax must be under $450,000 to receive rebate for the GST or the federal portion of HST. However, if the value is above the threshold, you may still be eligible to receive tax rebate for the provincial portion if the province offers it.
Types and Rates of Rebate
There are two types of rebates available with differing rates: rebate for owner-built houses and rebate for housing purchased from builders.
You may be considered to be a builder if:
- You are in the business of constructing or renovating houses for sale;
- AND You are the manufacturer or vendor of a new home;
- OR You bought an unoccupied home to resale;
- OR You have helped with completing with construction or renovation of the property;
- OR You have converted non-residential property to a residential property.
The term generally only refers to people who have interest in the land for business purposes and have renovated, reconstructed, or bought the property for trading purposes. As such, most people who buy or reconstruct their property that will be their residence will not be considered a builder. People who are considered to be builders are able to apply for the rebate for owner-built houses.
There are three different rates for the GST or federal portion of the HST rebate for three different situations:
- You purchased both the property and the land it sits on
- You purchased the property and leased the land it sits on
- You purchased a share of co-operative housing
How to Apply for the GST/HST New Housing Rebate
To apply for the rebate, you are at minimum required to submit two forms provided on the government website: one showing the calculation of your rebate for GST, and the other an application form. For provinces that also deduct some of the provincial taxes which are Ontario, BC, Nova Scotia, and Saskatchewan, you will also need to submit an additional form. The forms should be mailed to the provided tax centres on the government website.
Although no supporting documents are needed, you may be asked to provide proof of occupancy or invoices. You will receive your payment after up to six months. Keep in mind that there is a deadline for submitting the application, which is generally two years after the base date determined on the forms.
What Professionals Will I Need to Help Me Buy Land in Canada?
To buy a property in Canada, you will normally need a real estate agent, a real estate lawyer, a home inspector, an insurance agent, a property manager and a lender. If you buy with my help, I will connect you to the best in the industry.
I want to buy a property in Canada, but not in Victoria. Can you help?
I only sell real estate in the Victoria area, though I am happy to recommend an agent in in your desired location that can help.
Are you thinking about purchasing buy land and build your dream home or recreation property? If you’re looking for a realtor to work with you and guide you through the process, then give me a call/text at 250-858-0288.. or email firstname.lastname@example.org to start a conversation.
Patrick Novotny eXp Realty Victoria, BC 250-858-0288
- Kristine Geldart
- Carmel Ecker
- Yves and Christina Moog
- William Ward
- April Taylor Vance