Buying a new home? You may qualify for a GST Rebate!

Goods and Services Tax (“GST”) will typically be collected on the sale prices of most goods and services in Canada. Although GST does not need to be collected in respect of every home purchase, if you are looking to buy a newly constructed or substantially renovated home, the entire purchase price will be taxable. Fortunately, you may qualify for a rebate of a portion of the GST payable through Canada Revenue Agency’s (“CRA”) “GST/HST New Housing Rebate”.

In order to qualify for the GST/HST New Housing Rebate, the purchase price of the home must be less than four hundred fifty thousand ($450,000.00) dollars, before tax. Further, you must buy or build the home for use as the primary place of residence for yourself or your relation. Your “relation” can include your parents, siblings, children or other descendants, as well as your spouse, common-law partner, former spouse or former common-law partner.  Thus, if you or any of your relations are going to occupy the home as a primary residence, you may be eligible to recover some of the GST paid.

Your “primary place of residence” will be the home that you or your relation intends to live in on a permanent basis. To determine whether the home is a primary place of residence, the CRA may consider several factors, including without limitation:

(a)    whether you or your relation considers the home to be your or your relation’s main residence, respectively;

(b)   how long you or your relation actually lives in the home;

(c)    how the home is designated on personal and public records; and

(d)   tax returns filed by you or your relation

When buying a new home from a builder, you can take advantage of the GST/HST New Housing Rebate in a few different ways.  If you pay the full GST to the builder on closing, then you may apply directly to the CRA to receive your rebate; however, many builders take care of this process for you by giving the buyer a credit for the GST/HST New Housing Rebate and then collecting it from the CRA on behalf of the buyer.  This reduces the amount of money that the buyer needs in order to complete their purchase and eliminates the need for the buyer to apply for the rebate themselves.  You should check with your builder to determine if they will provide  this additional service.

At KH/Dunkley Law Group, we like to stay ahead of the curve when it comes to information regarding your home purchase. Whether you are buying a resale property or a new construction, we can provide you with the most up-to-date information regarding the taxes payable and rebates available on your purchase.  Further, we always ensure that our clients are receiving the correct credit from the builder for the GST/HST New Housing Rebate, or, if the builder is not providing a credit, we advise our clients on how to obtain their credit directly from the CRA.

Please feel free to contact our office for more information regarding the GST/HST New Housing Rebate.

KH/Dunkley Law Group

Written by Alexandra Shaffer
Barrister and Solicitor with KH/Dunkley Law Group

Written by Khalil Haji

Khalil is the principal lawyer of KH/Dunkley Law Group. He graduated as a gold medalist from the University of Calgary’s Haskayne School of Business, and then went on to obtain his Bachelor of Laws degree from the University of Western Ontario (graduating in 2007). After he graduated from the University of Western Ontario, he practiced law at national firms in both Calgary and Toronto. He opened his own firm - KH Law - in 2010, where he practiced until forming KH/Dunkley Law Group.