Do You Pay GST on a Newly Built Home in Alberta?

If you are buying a new home from a builder in Alberta, the price you were quoted may not tell the whole story about tax. GST can be a significant extra cost, and rebates may reduce it if you qualify.

This article explains when GST applies, when it is paid, and how the two main federal rebates work. Your purchase contract controls the details, so read it closely and ask your lawyer or an accountant about your situation.

This article covers the law of Alberta.

When GST applies in Alberta

Alberta has no provincial sales tax, so no PST is charged on a home purchase. Only federal GST can apply, to new homes and certain other cases.

GST is charged at 5% of the value of the consideration on a taxable supply made in Canada, and the recipient, meaning the buyer, pays it. Buyers of new condominium units in Alberta pay GST on the purchase price, and the GST/HST New Housing Rebate can reduce it on a declining scale based on price.

Is GST in the price, and when is it paid?

On a new home bought from a builder in Alberta, GST is payable on the full consideration, and it is payable at final closing, when possession is transferred to the purchaser. That comes from a 1998 CRA policy statement that may not reflect later changes.

Whether your contract states the price as including or excluding GST depends on the wording of the contract. Check this before you sign, because it changes how much cash you need at closing.

A purchaser of a new home may assign the GST new housing rebate to the builder, so the rebate is credited against the price at closing.

The New Housing Rebate

The GST/HST New Housing Rebate 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 bought or built as the claimant's, or a relation's, primary place of residence.
• A recreational cottage or investment property does not qualify.
• A claim must be made within two years after the base date.

The First-Time Home Buyers' rebate

The First-Time Home Buyers' GST/HST rebate covers up to 100% of the GST, or the federal part of HST, on a new or substantially renovated first home, to a maximum of $50,000. The full rebate applies at a price of $1 million or less, it is gradually reduced between $1 million and $1.5 million, and there is none at $1.5 million or more.

For a home bought from a builder, the purchase agreement generally must be dated on or after March 20, 2025. The builder can usually credit the rebate at closing; otherwise the buyer applies using Form GST190 or through their CRA account.

A substantial renovation generally means 90% or more of the existing house's interior is removed or replaced. The foundation, exterior and supporting walls, roof, floors and staircases need not be replaced, and garages and crawl spaces do not count. Eligibility dates and rules can change, so confirm them with the CRA or your accountant.

Resale homes, self-built homes and what to do next

The sale of a resale home is generally exempt from GST when made by a person who is not a builder of the complex. There are exceptions, including where the seller claimed an input tax credit on the last acquisition, such as a unit used in a business. CMHC also notes a resale condo may attract GST where the seller used the unit mainly (over 50%) for business, claimed input tax credits for improvements, or the unit was substantially renovated.

When a builder finishes construction or a substantial renovation and first gives possession, the builder is deemed to have sold the home, and tax is calculated on its fair market value. This does not apply to an individual builder who uses the home primarily as a residence for themself, a related individual or a former spouse or common-law partner and has not claimed an input tax credit.

• Ask the builder whether the price includes GST and whether the rebate will be credited at closing.
• Confirm which rebate you may qualify for, given the price and your first-time buyer status.
• Plan for GST being due at final closing if no rebate is credited.
• Keep your purchase agreement and closing documents in case you must apply for a rebate yourself.

Frequently asked questions