How Long Does the CRA Take to Pay the New Housing Rebate in Canada?

You filed your GST/HST new housing rebate application and now you are watching your bank account. It is natural to want a date, especially if you were counting on the money.

The CRA's processing time changes from year to year and is not something this article can promise. What we can do is explain which route you took, what the CRA expects with your application, and what to do while you wait. For anything that depends on your file, a lawyer or accountant can confirm.

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

First, which route did your rebate take?

Many buyers never wait on the CRA. The builder may pay the rebate to you or credit it against the price, and if it does, you do not send the application because the builder files it with its return. If your statement of adjustments already shows a credit, your timeline is really about the builder's filing, not yours.

If the builder did not pay or credit it, you claim directly on Form GST190. Note that only the builder who sells the house can pay or credit the rebate. If you bought an assigned agreement, the assignor cannot, so you claim directly from the CRA.

Where the application goes

It is worth checking the address before you mail your form. When the builder does not pay or credit, the location of the property decides the address.

What a complete application looks like

A claim that arrives with missing paper is more likely to be questioned. For a builder purchase, send the Form GST190, Form RC7190-ON if you are claiming an Ontario rebate, and a copy of the statement of adjustments. Keep worksheet RC7190-WS and your records for six years, but do not send the worksheet.

• Check that line 1 shows the GST or federal HST you paid, including tax paid on an assignment.
• Check that line 2 shows the purchase price excluding tax.
• Check that line 3 is 36% of line 1, up to the maximum.
• Confirm that the figure on line 4 carries to line C of the form.

Conditions that can lead to questions

A claim can take longer if there are questions about whether you qualify. For a builder purchase, the basic conditions are that the builder sold you a new single unit residential complex or residential condominium unit, you are an individual buying it as your own or a relation's primary place of residence, the total consideration is under $450,000, you have paid all applicable tax, and ownership transferred after substantial completion. The first person to occupy the home as a residence must be you or a relation, or you must make an exempt sale of the home before anyone occupies it.

The amount is a percentage of tax paid, not of price. If total consideration is $350,000 or less, the rebate is the lesser of $6,300 and 36% of the GST (or federal part of HST) paid. Between $350,000 and $450,000 it phases out, and at $450,000 or more the base rebate is nil. For example, with 5% GST paid on a $400,000 home, the rebate works out to $3,150.

• Only individuals can claim. Partnerships and corporations cannot, and an individual cannot claim if a partnership or corporation co-owns the house.
• A corporation that buys a new unit to rent out may be able to claim a different rebate on Form GST524 if the purchase was taxable and it is not the builder.
• If more than one person owns the home, only one individual can claim, and the other owners are listed as co-owners on Form GST190.
• The intent to use the home as a primary residence must be clear at the outset; a recreational cottage or an investment property does not qualify.

Delays, status and interest

No fixed number of weeks is something you can count on, so treat any timeline you hear as an estimate. Delays can come from a mismatch between the form and the supporting papers, a question about whether the occupancy or price conditions are met, or a claim sent to the wrong centre.

Whether interest is added to a late-paid rebate, and how much, depends on the rules that apply to your file, and it is a good question for an accountant. Keep in mind the clock on your own side: the claim must generally be filed within two years after ownership transfers, and for houses on leased land the two years run from possession.

What to do next

• Check your statement of adjustments to see whether the builder already credited the rebate.
• Confirm the date you filed and keep proof of mailing or submission.
• Re-check that the form went to the right tax centre for your property.
• Contact the CRA if the claim seems stalled, and write down the date, name or reference of each call.
• Keep your records for six years.
• If a letter arrives asking questions or reducing the amount, read it carefully and get advice before replying.

Frequently asked questions