GST rebate for first-time buyers of a new or substantially renovated home in Canada
Acquiring a first new home or a home that has undergone major renovations is an important step. To lighten the tax burden for buyers, the Canadian government offers a GST/HST rebate (Goods and Services Tax/Harmonized Sales Tax) or the federal portion of the HST. This article guides you through the eligibility criteria, rebate amounts, steps to apply, and associated timelines.
Eligibility criteria
To be eligible for this rebate, you must:
- Be at least 18 years old and be a Canadian citizen or a permanent resident of Canada.
- Not have owned, nor has your spouse or common-law partner, a residence used as your habitual place of residence in Canada or abroad during the current year or the four preceding years.
- Buy a new home or one that has undergone major renovations, intended to be your habitual residence.
- Be the first to occupy the home after its completion or after the major renovations.
These criteria are detailed on the Canada Revenue Agency (CRA) website.
Rebate amounts
The amount of the rebate depends on the value of the home:
- For a home with a value up to $1,000,000 : full refund of the GST or the federal portion of the HST paid.
- For a home valued between $1,000,000 and $1,500,000 : gradually reduced refund. For example, for a home valued at $1,250,000, the refund would be $25,000.
- For a home valued above $1,500,000 : no refund is offered.
Steps to apply
1. Check your eligibility : Make sure you meet all the criteria listed above.
2. Prepare the necessary documents : Gather the required documents, such as the purchase agreement, evidence of GST/HST payments, and any other relevant documents.
3. Submit your application : You can apply online through your CRA account or by sending the GST190 form, titled "GST/HST New Housing Rebate for Purchasers of New Homes," to the address indicated on the form. Note that builders may also credit the rebate directly to the purchase price of the home.
4. Keep a copy of your application : Keep a copy of all documents submitted for your personal files.
Processing timelines
Processing times vary depending on the submission method:
- Online submission : typically processed more quickly, often within a few weeks.
- Mail submission : may take several months depending on application volume and the complexity of your file.
It is recommended to submit your application as soon as possible after the purchase or completion of major renovations to speed up the process.
Concrete example
Marie, a resident of Montreal, bought a new home valued at $950,000. She meets all eligibility criteria and submits her application online to the CRA. After a few weeks, she receives a full refund of the GST paid at the time of purchase.
Practical tips
Act quickly : The sooner you submit your application, the sooner you will receive your refund.
Keep all documents : Keep track of all documents related to the purchase and the rebate application.
Consult a professional : If you have doubts about your eligibility or the application process, do not hesitate to consult a tax professional or a real estate advisor.