Is GST payable on a new home purchase in Alberta?
This answer covers the law of Alberta.
Yes, GST is generally payable on a new home bought from a builder in Alberta, because Alberta has no provincial sales tax and only federal GST can apply. GST is charged at 5% of the value of the consideration, and the buyer pays it. On a new home from a builder it is payable on the full consideration at final closing, when possession is transferred.
Whether the price in your contract already includes GST depends on the contract, so read it carefully before you sign. The GST/HST New Housing Rebate can reduce the tax: it is 36% of the GST paid, to a maximum of $6,300. It is available in full when the home's value is $350,000 or less, is reduced between $350,001 and $449,999, and is nil at $450,000 or more.
The home must be your (or a relation's) primary place of residence, so a recreational cottage or investment property does not qualify. You can assign the rebate to the builder, so it is credited against the price at closing. A separate First-Time Home Buyers' rebate may also help, so ask your lawyer or accountant which rebates fit your situation.
Key takeaways
- Alberta has no provincial sales tax, so only federal GST can apply to a new home, charged at 5% and paid by the buyer.
- On a new home from a builder, GST is payable on the full consideration at final closing.
- The New Housing Rebate is 36% of the GST paid, to a maximum of $6,300, and is nil at $450,000 or more.
- You can assign the rebate to the builder so it is credited at closing, and a claim must be made within two years after the base date.