GST/HST relief for first-time buyers of new homes

Why tax applies to new homes

Resale homes are usually exempt from GST/HST, but newly built and substantially renovated homes generally are not. Builders often quote prices with the tax included and the rebate assigned to them, so it's important to read exactly how your price is structured.

First-time buyer relief

Eligible first-time buyers of new homes may be able to receive relief on the GST or the federal portion of HST. The rules cover who qualifies as a first-time buyer, the type of home, price thresholds, agreement dates and occupancy.

Current details: [PLACEHOLDER: first-time buyer GST/HST relief amount, price thresholds and eligible agreement dates — confirm with the Canada Revenue Agency]. Provincial rebates may also apply in some provinces.

How it affects your mortgage

Lenders base your mortgage on the purchase price in your agreement. If the price includes tax net of a rebate assigned to the builder, that's the figure your down payment is calculated on. If you claim a rebate yourself after closing, you'll need the full amount available at closing.

Our brokers can review your agreement of purchase and sale with you so your down payment and mortgage approval line up with how the tax and any rebate are handled.

Next steps

Ask the builder how the price treats GST/HST and rebates, confirm your eligibility with the CRA or a tax professional, and have your lawyer review the agreement before it becomes firm.

Questions to ask a builder

Is the price quoted with GST/HST included or extra? Has any rebate already been credited in the price, and who is applying for it? What happens to the price if I don't qualify for a rebate? Are there other closing adjustments specific to new construction, such as utility hook-ups or development charges?

Getting these answers in writing before you sign helps you budget accurately and avoids a shortfall on closing day. Our brokers can then match the mortgage approval to the figures in your agreement.

How our brokers can help

Active Mortgage is a team of brokers working with a range of lenders. We can review your situation, explain the options that apply to you and compare real offers side by side. There's no cost to talk with us, and you're never under pressure to proceed.