GST & HST on New Homes

If you’re buying a newly built home, you may have to pay GST or HST on the purchase price, depending on your province.

When getting ready to buy, pay attention to whether or not the purchase price says GST/HST is included or is payable—every builder lists this differently. For example, given “$329,000 incl. HST” or “$329,000 + HST,” the difference is an extra $42,770 in Ontario (13% HST).

GST/HST New Housing Rebate

If your new home is priced at no more than $450,000 (before GST/HST), you may be eligible for a partial rebate of the 5% GST, so long as it’s going to be your primary residence.

The GST/HST New Housing Rebate amount you can receive changes proportionately, based on the purchase price of the home. For example, the rebate for homes valued at $350,000 or less reduces the GST paid from 5% to 3.5%. The rebate gradually reduces for homes in the $350,000–$450,000 range and there is no rebate for homes over $450,000.

To claim the rebate, you (the purchaser of the home) must include Form GST190 and file it with your personal income tax.

To ensure you’re making a well-informed decision when it comes to the purchase of your new home, consider enlisting the services of an accounting firm or a firm that specializes in securing HST rebates on new homes.

GST/HST when building

The general rule, if you’re building or significantly renovating a home and will be using it as your primary residence, you’re not a builder for GST or HST purposes. However, if you’re building for business purposes, like building a home to sell it, you are building for tax purposes.

Because there is grey area regarding this, including what constitutes a “significant renovation,” it’s best to consult with a real estate or tax lawyer to determine the specifics of your build.