How Much Is the GST/HST New Housing Rebate in Canada?

You bought a new home from a builder and want to know what federal GST/HST relief you might get. The answer depends on the tax you paid and on the total consideration for the home, and the numbers work differently below and above certain price points.

This article walks through the calculation for a builder purchase step by step: the base rebate, the phase-out, how price is measured, the first-time buyer top-up, and where the numbers go on Form GST190. Federal rules only are covered.

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

Step 1: The base rebate is a share of tax paid

The base rebate comes from section 254(2) of the Excise Tax Act. For a home bought from a builder where total consideration is $350,000 or less, the rebate is the lesser of $6,300 and 36% of the GST (or the federal part of HST) you paid.

The starting amount is a percentage of tax paid. CRA's 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.

To qualify at all, the buyer must be an individual buying for their own or a relation's primary place of residence, total consideration must be under $450,000, all applicable tax must be paid, and ownership must transfer after substantial completion. The first individual to occupy the home as a residence must also be the buyer or a relation, unless the buyer makes an exempt sale of the home before anyone occupies it.

Step 2: The phase-out from $350,000 to $450,000

Where total consideration is between $350,000 and $450,000, the rebate is A × [($450,000 − B) ÷ $100,000]. A is the lesser of $6,300 and 36% of the tax paid, and B is the total consideration. At $450,000 or more the rebate is nil.

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

What counts as the price

For a house bought from a builder, the $350,000 and $450,000 thresholds are tested against total consideration, which is the purchase price excluding GST/HST and certain other amounts.

If your purchase agreement was assigned to you, there may be two builders, and you may pay GST/HST to the original builder and to the assignor for the interest transferred. Assignment fees count toward the price threshold only if they are taxable.

Different thresholds apply to a house on leased land or a co-op share: $472,500 for the base test and $1,575,000 for the first-time buyer test.

Step 3: The first-time home buyer top-up

Under section 254(2.1), for a new home with total consideration of $1,000,000 or less, the first-time home buyers' rebate is the lesser of $50,000 and the tax paid, minus any section 254(2) rebate. It can be claimed in addition to the base rebate as a top-up.

For consideration between $1,000,000 and $1,500,000, the rebate is C × [($1,500,000 − D) ÷ $500,000]. C is the lesser of $50,000 and tax paid, and D is the total consideration. At $1,500,000 or more it is nil. A $1,250,000 home gets half, up to $25,000.

On a home at or above $450,000, the base rebate is nil, so only the first-time buyer rebate can apply, if you qualify. You must meet the eligibility tests, and the agreement and completion dates must fall within the set timing. A buyer who fails the first-time buyer test may still qualify for the regular new housing rebate.

Step 4: Putting the numbers on Form GST190

For a builder purchase, the CRA worksheet steps are as follows.

• Line 1 is the GST or federal HST paid on the house, including tax paid on an assignment.
• Line 2 is the purchase price paid to the builder, excluding tax.
• Line 3 is 36% of line 1, up to the maximum.
• Line 4 is the final amount carried to line C of Form GST190.

Where the total consideration is between $350,000 and $450,000, the rebate is phased out, and at $450,000 or more it is nil. Do not send the worksheet. Keep it and your supporting records for six years.

What to do next

• Find the GST or federal HST you paid and the total consideration on your statement of adjustments.
• Check whether the price falls under $350,000, between $350,000 and $450,000, or above.
• Check the first-time buyer tests if the price is $450,000 or more.
• Consider speaking with a lawyer or accountant if your purchase involved an assignment, leased land or a co-op share.

For a house bought from a builder, the application deadline is two years after ownership transfers, and for houses on leased land the two years run from the date possession was transferred. A missed two-year deadline on a builder purchase generally means the rebate is lost.

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