Can I assign a pre-construction contract and still claim the GST/HST new housing rebate in Canada?
This answer covers Canadian federal tax law, which applies in every province.
Assigning a pre-construction agreement does not automatically end the rebate, but it changes who can claim and how the tax works. The person who ends up taking ownership, the assignee, may claim the GST/HST new housing rebate if the usual conditions are met, including buying the home as their own or a relation's primary place of residence and staying under the price limit.
With an assignment there may be two builders, and the assignee may pay GST/HST to the original builder and to the assignor for the interest transferred. Assignment fees count toward the price threshold only if they are taxable. Only the builder who sells the house can pay or credit the rebate, so an assignee must claim directly from CRA on Form GST190, and tax paid on an assignment goes on line 1.
First-time buyer relief is stricter: a buyer who takes over another person's builder agreement signed before the cut-off date announced by Finance cannot claim the first-time buyer rebate, and cancelling and replacing an earlier agreement may disallow it. A missed deadline on a builder purchase generally means the rebate is lost. Whether you can claim as the original buyer depends on your facts, so confirm with a lawyer or accountant.
Key takeaways
- The assignee, who ends up taking ownership, generally claims directly from CRA on Form GST190, because only the builder who sells the house can pay or credit the rebate.
- GST/HST may be payable to both the original builder and the assignor, and tax paid on an assignment is included on the claim form.
- Assignment fees count toward the price threshold only if they are taxable.
- A buyer who takes over a builder agreement signed before the Finance cut-off date cannot claim the first-time buyer rebate.