GST/HST New Housing Rebate Versus Provincial Rebate in Canada

In HST provinces, the tax you pay on a new home is a single rate on the invoice, but it is made up of a federal part and a provincial part. The rebates follow that split, which is why buyers are often unsure which rebate they are reading about.

This article explains what the federal GST/HST new housing rebate covers, how it is claimed from the Canada Revenue Agency (CRA), and why provincial amounts are a separate question. It does not describe any province's own rules.

This article covers Canadian federal tax law, which applies in every province.

What the federal rebate is based on

The federal rebate is the lesser of $6,300 and 36% of the GST, or the federal part of HST, paid, when total consideration is $350,000 or less. It then phases out between $350,000 and $450,000 and is nil at $450,000 or more.

The rebate is a percentage of tax paid, not of price. The CRA guide says to multiply the GST or federal HST paid by 36%, capped at $6,300, at 5% GST or 13%, 14% or 15% HST. So the amount you receive depends on the tax you paid, up to that cap.

As an example, with 5% GST paid on a $400,000 home, the starting amount is capped at $6,300 because 36% of $20,000 is $7,200. The rebate is then $6,300 × ($450,000 − $400,000) ÷ $100,000, which is $3,150.

A second federal rebate for first-time buyers

For a new home with total consideration of $1,000,000 or less, a qualifying first-time home buyer can receive the lesser of $50,000 and the tax paid, minus any base rebate. It phases out to nil at $1,500,000.

For a builder purchase of a primary residence at $450,000 or more, the base rebate is nil, and only the first-time home buyer rebate can apply, if the buyer qualifies. A buyer who does not meet the first-time buyer test may still qualify for the regular rebate. Some details differ for mobile, modular and floating homes, where the first-time buyer rebate may cover only part of the tax paid.

How the federal rebate is claimed

• Through the builder: the builder may pay the rebate to you or credit it against the price. If it does, you do not send an application and the builder files it with its return.
• Directly from the CRA: if the builder does not pay or credit it, you generally have up to two years from the date ownership was transferred to claim it on Form GST190.
• Documents: send the form, Form RC7190-ON if claiming an Ontario rebate, and a copy of the statement of adjustments; keep the worksheet and records for six years.
• Where: the Sudbury Tax Centre handles properties in Sudbury/Nickel Belt, Toronto or Barrie, and the Prince Edward Island Tax Centre handles properties elsewhere in Canada.

If the two years pass on a builder purchase, the rebate is generally lost.

Only the builder who sells the house can pay or credit the rebate. If the purchase agreement was assigned to you, the person who assigned it cannot, so you claim directly from the CRA on Form GST190.

Only individuals can claim the rebate, and partnerships and corporations cannot. Where more than one individual owns the house, only one of them can claim it. A corporation that buys a new unit to rent out may instead be able to claim the new residential rental property rebate on Form GST524, if the purchase was taxable and it is not the builder.

Where the provincial part fits

Provincial rebates are set by each province and vary in amount, price limits and how they are claimed. This library covers federal tax only, so a provincial rebate is not covered here. The fact that a CRA form refers to a provincial rebate, as Form RC7190-ON does for Ontario, shows that the two can be applied for together, but it does not tell you the provincial amount or conditions.

The extent of builder crediting can also differ depending on the province, so ask your builder what it will credit and what you must claim yourself. A lawyer or accountant can confirm which provincial rules apply to your purchase.

What to do next

• Read your statement of adjustments and find the GST or HST charged, and how it is split between federal and provincial parts.
• Ask the builder what it will pay or credit at closing and what is left for you to claim.
• Confirm you meet the conditions, including that the home is a primary place of residence for you or a relation.
• Diarize the two-year deadline from the date ownership transfers.
• Check the provincial rebate rules separately, with the province's own guidance or a professional.

Frequently asked questions