How is the HST self-assessment amount calculated when I start renting out a home I built myself?

When an owner-built home is converted to long-term rental use instead of being sold or used as your own residence, the self-assessment is generally based on the fair market value of the property, the land and the building together, at the time the change of use occurs, not on what you actually spent building it. HST is then calculated as if you'd sold yourself the completed property at that fair market value and immediately bought it back, so the amount owing rises or falls with the property's actual value at that moment, rather than your construction costs.

This is why the timing of the self-assessment matters so much, waiting to determine when the change of use technically occurred, and getting a defensible valuation for that date, directly affects how much HST is owed. It's also why the amount can come as a shock to an owner-builder who spent far less building the home than it's now worth on the market, since the tax is based on the higher current value, not their actual costs.

Because the valuation date and method used can be challenged by the CRA if they're not well supported, get a proper appraisal and calculation done by an advisor at the time you start renting the property out, rather than estimating the figure yourself.