The GST/HST New Housing Rebate Explained

The GST/HST new housing rebate is a partial refund from the Canada Revenue Agency (CRA) of the federal sales tax you pay when you buy a newly built or substantially renovated home, or build one yourself. If the home is your primary residence and you are the first person to occupy it, you can typically recover 36% of the federal GST paid, up to a published maximum. In a province that charges HST, you may also qualify for a separate provincial rebate on top.

Why a new home carries a tax that resale usually doesn't

Builders and developers must charge GST/HST on the sale of a new or substantially renovated home. A resale home sold by an individual owner generally isn't taxed the same way, which is why a new build often ends up costing more than the sticker price suggests. The rebate exists to soften that tax for people buying a place to actually live in.

There are two ways the money reaches you. The builder can credit the rebate to you at closing — an embedded rebate already baked into your purchase price — or you pay the full tax and apply to the CRA yourself afterward. Ask which approach applies before you sign, because you can't claim the same rebate twice.

Federal new housing rebate: who qualifies

The personal federal rebate is aimed at owner-occupiers, not investors. You generally need to meet all of the following:

• You buy a new or substantially renovated home, a newly built unit, or a share in a co-op housing corporation.
• The home becomes your primary place of residence, or the primary residence of a close relative.
• You are an individual, at least 18 years old, and a Canadian resident.
• You are the first person to occupy the home as a residence.
• You file the application within the required deadline — generally two years after ownership or possession transfers.

Corporations and trusts usually can't use the personal rebate. If your name is on title but the property is a pure investment, look at the rental route instead. These tie into the same ownership picture covered in the principal residence exemption, so it pays to get your facts straight early.

How much you can get back

The federal rebate refunds 36% of the GST paid, subject to a maximum that has long been set at $6,300. It is fully available on lower-priced homes and phases out as the home's value climbs, disappearing entirely above an upper threshold. Provincial rebates follow their own rules and caps. Confirm the current thresholds and maximums on the CRA's forms before you budget a dollar figure, because these amounts are set by legislation and can change.

Tax piece	Administered by	What it typically refunds
Federal GST / federal part of HST	CRA	36% of the federal tax paid, up to a capped maximum
Ontario provincial part of HST	CRA	A percentage of the provincial part, to a set maximum, phasing out on higher-priced homes
Nova Scotia, New Brunswick, Newfoundland and Labrador, Prince Edward Island	CRA	Provincial rebate where offered; terms and caps vary by province
Quebec GST and QST	Revenu Québec	A separate provincial rebate claimed through Revenu Québec
Alberta, British Columbia, Saskatchewan, Manitoba	—	No HST provincial part on new housing, so no matching provincial rebate

Provincial programs are the part most buyers overlook. A builder who quotes a single "rebate" number may only be talking about the federal piece, so ask specifically whether the provincial portion is included.

Renting it out: the New Residential Rental Property Rebate

If you buy or build a new home to rent to tenants rather than live in, the personal rebate doesn't apply. Instead you use the New Residential Rental Property Rebate (NRRPR), which refunds the federal GST paid on the purchase. The federal rental rebate is generally not subject to the same price-based caps as the personal rebate, though provincial treatment varies and some provinces limit their portion.

Key conditions: the property must be a residential complex used for long-term rental, you must own it as a landlord, and you must apply within the deadline. You cannot claim both the personal and rental rebates on the same unit — it's one or the other. If you're weighing a rental purchase, read counting rental income for mortgage qualification before you commit, since the tax rebate doesn't change how a lender views the deal.

Owner-built homes and assignment sales

When you build your own home or hire a contractor to build on land you already own, you pay GST/HST on the materials and services rather than on a single purchase price. You can still claim a rebate on those eligible amounts using the owner-built section of the CRA's new housing rebate form, and a separate rebate may apply to the land itself.

Assignment sales add another layer: if you buy a unit on paper and assign the purchase agreement before closing, the tax charged on your deposit may be recoverable, but the rules are technical and depend on the paperwork. Get professional advice rather than guessing.

How to apply — and the mistakes that cost people the money

Most buyers file the CRA's new housing rebate application for houses purchased from a builder, using the rental version for investment property and the owner-built section for self-builds. Keep everything: the purchase agreement, the statement of adjustments showing the tax paid, and proof of occupancy.

The most common ways people lose the rebate:

1. Filing after the deadline, which is generally two years from the transfer of ownership or possession.
2. Assuming a used home qualifies — resale homes sold by individuals generally don't.
3. Claiming a rebate the builder already credited in the purchase price.
4. Never actually moving in as the first occupant.
5. Buying as a corporation or trust and using the personal form instead of the rental form.

Don't count the rebate as your down payment

The rebate usually lands after closing, so it can't fund your deposit or down payment. You still have to qualify for the mortgage under the federal stress test, which uses the higher of your contract rate plus two percentage points or a published qualifying-rate floor — confirm the current floor with OSFI or your lender. Your GDS and TDS ratios also have to stay within the lender's limits, and if your down payment is under 20% you'll pay CMHC mortgage default insurance.

Treat the rebate as a partial recovery of money you've already spent, not as upfront cash. Budget for closing costs when buying a house in Canada, land transfer tax in your province, and mortgage default insurance alongside the tax, and run the numbers through a mortgage payment calculator so the rebate is a bonus rather than a crutch. If you own more than one property, also check whether the underused housing tax applies to you.