GST on New Homes in Alberta: When It Applies and Who Pays

If you are buying a brand new house or condo in Alberta, the price in the sales brochure may not be the whole story. GST can apply to new homes, and it affects how much money you need at closing.

This article covers whether GST is added, who pays it, when it is due, and the rebates that can reduce it. Your contract controls the details, so have it reviewed before you sign.

This article covers the law of Alberta.

Does GST apply to a new home in Alberta?

Alberta has no provincial sales tax, so no PST is charged on a home purchase. Only federal GST can apply, for example on new homes.

GST is charged at 5% of the value of the consideration on a taxable supply made in Canada, and the buyer pays it. Buyers of new condominium units in Alberta pay GST on the purchase price. On a new home bought from a builder, GST is payable on the full consideration.

When and how it is paid

For a new home bought from a builder in Alberta, GST is payable at final closing, when possession is transferred to you. That CRA policy statement was issued in 1998 and may not reflect later changes, so confirm the current approach with your lawyer or accountant.

You may be able to assign the GST new housing rebate to the builder, so the rebate is credited against the price at closing. Whether GST is included in the stated price or added on top depends on your contract. Read that clause carefully and ask the builder to explain it in writing.

The rebates that can reduce GST

Two federal rebates may apply. They are separate, and your eligibility depends on your facts.

The New Housing Rebate requires that the home be bought or built as your (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.

First-time buyer rules to check

The First-Time Home Buyers' rebate applies to a new or substantially renovated first home. 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 you apply using Form GST190 or through your CRA account.

A substantial renovation generally means 90% or more of the existing house's interior is removed or replaced. Foundation, exterior and supporting walls, roof, floors and staircases need not be replaced, and garages and crawl spaces do not count. Because this rebate is recent, confirm the current dates and eligibility on the CRA pages.

Resale homes and builder-occupied homes

A resale home is treated differently from a new one. The sale of a residential complex is exempt from GST when it is made by a person who is not a builder of the complex. There are exceptions. The exemption does not apply if the seller claimed an input tax credit on the last acquisition of the complex, for example a unit used in a business.

For a resale condo, GST may apply where the seller used the unit mainly (over 50%) for business, claimed input tax credits for improvements, or the unit was substantially renovated. Another exception applies where a GST-registered buyer bought from a prior taxable seller within one year, no individual has lived in the home since construction or last substantial renovation, the sale follows a right to purchase in the prior agreement, and an election is filed.

If you build or renovate a home yourself, a different rule can apply. When the work is substantially completed and the builder first gives possession or occupancy, the builder is deemed to have sold the home, and tax is calculated on its fair market value. That rule 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. How this applies to you depends on your situation, so it is worth confirming with a lawyer or accountant.

What to do next

• Ask the builder in writing whether the price includes GST.
• Ask whether the builder will credit any rebate at closing, and what you must sign to allow it.
• Check whether you meet the first-home and primary residence tests.
• Note your agreement date, since it matters for the First-Time Home Buyers' rebate.
• Budget for GST being due at final closing if no rebate is credited.
• Have a lawyer review the purchase agreement before you sign.

Frequently asked questions