GST and PST Rebates on a New Home Rental in British Columbia

Buying a new or substantially renovated home to rent out can raise a question that resale buyers rarely face: can you recover some of the GST or PST built into the price? The answer turns on how the home will be used, who the buyer is, and how the purchase is structured.

This article does not set out the rebate conditions or amounts, because they depend on your facts. Instead it explains what to ask, which other taxes and rules apply to the same purchase, and how to prepare so an accountant can answer quickly.

This article covers the law of British Columbia.

Why rental use changes the tax picture

Tax treatment often differs depending on whether you will live in the home, rent it long term, or sell it. A rebate that suits an owner-occupier may not suit a landlord, and the reverse can be true. The conditions, amounts and deadlines are set by federal and provincial tax rules, and they should be checked against your own plans before you sign a purchase contract.

Contract wording matters too. Ask whether the price is stated with or without GST, and whether any rebate is being assigned to the seller or builder. A lawyer can review that wording, and an accountant can confirm the tax result.

Questions to put to your accountant

• Will I be the first occupant, or will a tenant be?
• Am I buying as an individual, through a corporation, or through a trust?
• Is the home new, or substantially renovated, and who did the work?
• Do I intend a long-term rental, a short-term rental, or a sale?
• Which rebate forms apply, and what are the deadlines?
• Does claiming a rebate affect how I report rental income later?

Other taxes that apply to the same purchase

Rebates are only one piece. Property transfer tax base rates are 1% of fair market value up to $200,000, 2% on the portion over $200,000 up to $2,000,000, and 3% on the portion over $2,000,000. A further 2% applies to the residential value above $3,000,000.

If the buyer is a foreign national, foreign corporation or taxable trustee, BC's additional property transfer tax is 20% of the fair market value of the buyer's proportionate share of the residential portion of a property in a specified area. The specified areas are the Capital Regional District, Fraser Valley Regional District, Metro Vancouver Regional District, Regional District of Central Okanagan and Regional District of Nanaimo. Where title is shared with a Canadian citizen or permanent resident, only the foreign buyer's share is taxed.

Foreign buyers and rental purchases

Federal law bars a non-Canadian from purchasing, directly or indirectly, any residential property. The Act came into force January 1, 2023, and the Department of Finance announced in February 2024 that the ban would be extended to January 1, 2027. Check the current status before relying on that date.

There are exceptions, including property outside a census agglomeration or census metropolitan area, and a work permit holder who meets the conditions, such as having 183 or more days of validity left on the purchase date and not having bought more than one residential property. Contravening the ban can mean a fine of not more than $10,000.

What to do next

• Speak with an accountant about GST and PST rebates before you make an offer or remove conditions.
• Ask a lawyer to review how the purchase contract treats GST and any rebate.
• Confirm who will hold title and whether the foreign buyer rules could apply.
• Budget for property transfer tax and, if needed, the additional tax.

Doing this early lets you price the investment properly and avoids surprises on the completion date.

Frequently asked questions