GST Rebate on New Homes: How It Works (2025 Guide)

Buying a newly built home or planning a major renovation? There’s a little-known rebate that could save you thousands — and it’s one many homebuyers in Canada overlook until it’s too late.

We’re talking about the GST/HST New Housing Rebate.

Whether you’re a first-time buyer, building your dream home, or tearing your place down to the studs, this rebate can help soften the blow of those hefty closing costs. In this guide, we’ll walk you through exactly how it works, who qualifies, how much you can get, and what it means for your mortgage.

What Is the GST/HST New Housing Rebate?

Why This Rebate Exists
The GST/HST New Housing Rebate is Canada’s way of giving you a bit of a break when you’re buying, building, or significantly renovating a home. It offers a partial refund of the Goods and Services Tax (GST) — or the Harmonized Sales Tax (HST), depending on your province — paid on new or substantially renovated homes.

It’s a simple concept, but the details can get murky — especially since rules vary by province.

Who’s Behind It?
The rebate is administered by the Canada Revenue Agency (CRA). In some provinces, there’s a provincial portion too — think of it as an extra rebate layered on top of the federal one.

Do You Qualify for the Rebate?

Basic Eligibility

To keep it simple, you may be eligible if:

The home is newly built, substantially renovated (90%+ of the interior), or owner-built
You plan to live there — it must be your primary residence
You’re an individual buyer, not a corporation or partnership
You bought it from a builder, built it yourself, or did major renovations

Additional Notes

Leasing land long-term (20+ years)? You could still qualify.
You have 2 years from the date of possession to apply.
You’ll need to keep receipts and records for 6 years in case CRA ever comes knocking.

What About Provincial Rebates?

Depending on where you live, you might be able to get more than just the federal GST rebate. Several provinces offer their own rebates to help offset the added cost of buying or building a home — especially in places where the Harmonized Sales Tax (HST) applies.

In plain terms? If you’re in a province like Ontario, you could qualify for both federal and provincial rebates, which can add up to a meaningful amount.

Here’s a general overview of how it looks across some provinces:

Province	Sales Tax	Federal Rebate?	Provincial Rebate?	Eligible Price Range	Where to Apply
Ontario	13% HST	Yes	Yes — up to $24,000	$350K to $450K	CRA + Ontario rebate form
British Columbia	5% GST	Yes	No provincial rebate	Up to $350K to $450K	CRA only
Alberta	5% GST	Yes	No provincial rebate	Up to $350K to $450K	CRA only
Quebec	5% GST + 9.975% QST	Yes	Yes — partial rebate available	Similar price thresholds	CRA + Revenu Québec

Heads-up: These numbers and thresholds can change. If you’re thinking about buying or building, it’s worth checking in with your Red Key Mortgage Broker or provincial tax authority to confirm what’s currently available.

The federal rebate begins phasing out once the home’s fair market value exceeds $350,000 and disappears entirely at $450,000

What’s New for 2025?

A few provinces are starting to update their rebate programs in 2025 to make things a bit easier for homebuyers — especially those trying to break into the market for the first time.
One example? There have been discussions nationally about improving housing affordability, but Alberta currently has no provincial GST/HST rebate and has not announced any official new rebate programs for 2025.

Are you thinking of buying? Have a quick chat with your mortgage broker, they’ll be able to tell you if this new rebate could work in your favor.

Eligibility Checklist (Step-by-Step)

Types of Homes That Qualify

✔️Newly built homes from a developer

✔️Substantially renovated homes (90%+ interior)

✔️Owner-built homes

✔️Mobile and floating homes

Who Can Apply

Must be an individual, not a business
You must own and occupy the home as your primary residence

How the GST Rebate Process Works

1. If You’re Buying from a Builder

There are typically two ways this plays out:

Option 1: The builder applies the rebate right away — it’s already baked into your purchase price, so you don’t have to do anything. But GST is still legally applied and remitted by the builder.
Option 2: You pay the full GST or HST at closing, then apply to get some of it back directly from the CRA.

Both options lead to the same result — it’s just a matter of whether the rebate gets handled upfront or after closing.

2. If You’re Building or Renovating Yourself

Doing it yourself? You’ll need to pay GST/HST on your materials, labour, and contractor costs — then claim that portion back through CRA.

Here’s what that process looks like:

Form GST191 — This is for owner-built or substantially renovated homes.
Worksheets A and B— These walk you through how to calculate your rebate step by step.

3. What Forms You’ll Need

If you’re applying on your own, make sure you’ve got the right paperwork:

GST190 — This one’s for buyers who purchased from a builder.
GST191 — For owner-built or heavily renovated homes.
Worksheets A and B — These walk you through the rebate calculation.

Pro tip: Double-check that you’re using the most recent versions from the CRA website

4. Document to Keep on Hand

Make sure your file folder (or cloud folder) includes:

Your Agreement of Purchase and Sale
Proof that you live there — like a utility bill or driver’s license
Receipts for materials, contractor invoices, and services
Keep everything for at least six years — CRA can audit your file long after the fact

5. When to Apply

You have two years from the date you take possession to submit your application.
The CRA usually takes anywhere from 2 to 4 months to process rebate claims, depending on how straightforward your file is.

✅Pro Tip: Chat with your mortgage advisor early in the process. They can help you estimate how much of a rebate you’ll qualify for — and that number can be useful when planning your down payment, mortgage amount, or overall budget.

Builder Credit vs Claiming It Later: What’s Better?

Scenario	Purchase Price	GST Paid by You	Rebate	Final Cost
Builder Credits (*)	$400,000	$0	$6,000 credit	$394,000 upfront
Claim Later	$400,000	$20,000	$6,000 refund	$394,000 after CRA

Either way, the net cost is similar — but having the rebate applied upfront could reduce your mortgage and lower your closing costs.

(*) The builder may “credit” the rebate amount so it reduces the effective purchase price, but GST is still legally applied and remitted by the builder.

Real-World Reference Example

Say you’re a first-time buyer in Alberta looking at a $370,000 newly built home. With today’s GST rules, you could be looking at a rebate in the ballpark of $5,300 — not bad for a bonus that can help lower your upfront costs or trim down how much you need to borrow.

Wondering how that actually plays out?

Well, shaving a few thousand off your mortgage could lower your payment by about $35 a month. It might not seem like much at first glance, but over five years, that’s more than $2,000 saved — just from a tax rebate.

It’s a great reminder that small incentives can make a real impact when you’re budgeting for your first home.

How a GST Rebate Can Affect Your Mortgage

A GST rebate might not seem like a huge deal on paper, but in reality? It can ease some of the financial pressure that comes with buying a home — especially if you’re already stretching your budget to make things work.

Even getting a few thousand back could mean you don’t have to borrow quite as much, or that your monthly payments are just a little lighter. Over time, that can really add up.

Let’s say you’re looking at a $400,000 home, and the builder knocks $6,000 off through the GST rebate. Now your mortgage is based on $394,000 — not the full price — before you even sit down with the lender.

It might not feel like a game-changer in the moment, but that smaller mortgage could lower your monthly payments and, depending on how much you’re putting down, even reduce your CMHC insurance.

Key Provincial Considerations (What Varies Across Canada)

Depending on where you’re buying, the rebate rules can change quite a bit. Here’s a quick walkthrough of how things stack up in a few key provinces:

Ontario

HST is 13%
You may qualify for both federal and provincial rebates
The maximum provincial rebate is up to $24,000

British Columbia

GST applies at 5%, but watch out — there’s also Property Transfer Tax (PTT)
No provincial rebate here — just the federal rebate is available

Alberta

No provincial rebate here — just the federal rebate is available

Quebec

Quebec uses both GST and QST, so it’s a two-part process
You’ll need to apply separately for each portion of the rebate

Quick note: These programs change from time to time. It’s always smart to check with your mortgage broker or local tax office to make sure you’re getting the most current info.

Avoid These Common Mistakes

❌ Not keeping receipts
❌ Assuming the builder included the rebate when they didn’t
❌ Missing the 2-year application window
❌ Confusing possession date with occupancy date (they matter!)

Frequently Asked Questions

Q: Can I claim the rebate on a rental property?
A: Not this one — but there’s a separate New Residential Rental Property Rebate.

Q: What if I sell the home shortly after moving in?
A: CRA may review whether you intended it to be your primary residence. Be ready to show things like utility bills or your driver’s license with the home address.

Q: What if I built the home myself?
A: You can still qualify — just submit the right forms and your receipts.

Q: Can I get both federal and provincial rebates?
A: You can — as long as your province offers both and you meet the criteria. It’s worth double-checking the fine print or talking it through with a mortgage advisor just to be sure.

Maximize Your Rebate: What to Do Next

✅ Ask your builder if the rebate has already been included in the price

✅ Talk to your mortgage advisor to see how it might affect your loan or approval

✅ Make sure your lawyer flags the rebate in your closing documents

✅ Apply early — it’s one less thing to stress about later

Final Thoughts

The GST/HST New Housing Rebate isn’t flashy, but it can quietly save you thousands — if you plan ahead and know how to work it into your financing.

Whether you’re buying your first place, building new, or doing a big reno, this is one of those details that’s easy to miss — but worth getting right.

We’re always happy to help clarify how this may relate to your mortgage strategy. However, we’re not accountants, and while this information is deemed reliable, it should not be considered tax advice. Always confirm your specific situation with your accountant or tax professional.