Substantial Renovation GST/HST Rebate in Canada: What Counts

You gutted an old house down to the studs, or you are buying one that someone else has rebuilt, and you wonder whether the federal GST/HST new housing rebate applies. It can, but renovation has to be big to count.

This article explains what substantial renovation generally means, who can claim, how the amount is worked out for an owner who renovates, and what paperwork to keep.

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

What counts as a substantial renovation

Generally, 90% or more of the interior of an existing house is the minimum that must be removed or replaced, counting only livable areas. A home that meets this test can qualify for the new housing rebate like a new one.

A kitchen and bathroom update, new flooring or a fresh coat of paint will not usually reach that level. If your project is close to the line, have your contractor's scope of work reviewed before you rely on the rebate.

Who can claim

Only individuals can claim the new housing rebate. Partnerships and corporations cannot, and an individual cannot claim if a partnership or corporation co-owns the house.

Your intent matters too. The intent to use the house as your or a relation's primary place of residence must be evident at the outset of buying, building or substantially renovating. A recreational cottage, an investment property, or a house you plan to use on a more distant occasion such as retirement does not qualify.

The home can be for a relation. A parent may qualify when renovating for an adult child who will live there, if all other conditions are met. Relation includes blood relatives, spouses, common-law partners and adoptive relations, and for this rebate only, former spouses and former common-law partners also count.

Where more than one individual owns the house, only one can claim, and the others are listed as co-owners on Form GST190.

How the amount works when you renovate yourself

An individual who substantially renovates a single unit residential complex or condo unit, or hires someone to do so, for their or a relation's primary residence may claim if the fair market value on substantial completion is under $450,000. The rebate is A × ($450,000 − B) ÷ $100,000. B is the greater of $350,000 and fair market value, and A is the lesser of 36% of tax paid and $6,300 (at 5% GST).

For these homes the price test uses fair market value, not a contract price. A first-time buyer top-up can also exist for renovations that begin after March 19, 2025 and before 2031 and are substantially complete before 2036. Whether you qualify for that top-up depends on further tests worth confirming with an accountant.

Deadline and records

For an owner-built or renovated home, you apply within two years after the base date. The base date is the earliest of two years after first occupancy, the ownership transfer date, or substantial completion. The deadline therefore runs from that base date and not from the day you move in.

The Minister may allow a later filing, but CRA considers late owner-built requests only in extraordinary circumstances.

Only original invoices in your or your co-owners' names are accepted. Send invoices only where GST/HST was not charged, and keep original invoices and records for six years.

• Keep every contractor and supplier invoice in your name.
• Keep proof of when work was substantially complete.
• Keep records showing the home was meant as a primary residence.

What to do next

• Get a written breakdown of what interior areas were removed or replaced.
• Confirm that the project meets the interior test with your contractor or accountant.
• Work out your base date and diarize the two-year deadline.
• Collect original invoices and decide who the single claimant will be.
• If you are buying a renovated house, ask the seller how the renovation was treated for GST/HST.

Frequently asked questions