To help you navigate post-CERB Canada, here is everything you need to know about what government help is available to you in 2022.
Thinking of purchasing a home? If so, you’re in for an expensive ride. The average house price in Canada is $716K, a 31.6% increase from last year. That number is even higher if you live in a metropolitan city like Vancouver or Toronto.
And the purchase price isn’t the only cost you need to worry about. Property tax, mortgage interest, insurance, maintenance, repairs, and renovations, and GST/HST all add up to making a house one of the most expensive things to purchase and maintain.
Luckily, the Canadian federal government offers a new GST/HST housing rebate to assist with the cost of taxes.
What Is The GST/HST New Housing Rebate?
Canada’s GST/HST New Housing Rebate helps Canadian individuals recover some of the GST or the federal part of the HST paid for a new or extensively renovated house. The house must be used as the individual’s or the individual’s relative’s primary place of residence to be eligible for this rebate.
Who Is Eligible For The GST/HST New Housing Rebate?
There are different eligibility requirements for the GST/HST New Housing Rebate depending on the type of house in question.
Here are the eligibility requirements for the individual owning an owner-built house to receive some or all of the GST/HST New Housing Rebate:
- built, or had someone else build, a house on land that the individual already owned or leased
- substantially renovated (at least 90% of the house) by the individual or someone else engaged by the individual
- renovated and built a significant addition to the individual’s house, such as a second story.
- individual’s house was converted from a non-residential property
- individual purchased a new or significantly renovated floating home
Note: Individuals who purchase a mobile or floating home can either claim the owner-built new housing rebate or the new housing rebate for a house purchased from the builder.
House Purchased From A Builder
For an individual that purchases a home from a builder to receive some or all of the GST/HST New Housing Rebate, they must have either:
- purchased a new or significantly renovated house from a builder;
- purchased a new or significantly renovated mobile or floating home from a builder, manufacturer, or vendor;
- purchased a share of capital stock of a co-op where the co-op paid tax for a new or significantly renovated house; or
- purchased a new or significantly renovated house from a builder that leased them the land for 20 years or more, or that gives them the option to buy the land.
For an individual to qualify for the rebate for a renovated house, one of the following criteria must apply:
- Existing house is substantially renovated
- House is converted from a non-residential property
- House underwent a major addition, such as a second story
Are you a first time home buyer? Check out our breakdown of starter vs permanent homes.
How To Calculate The GST/HST New Housing Rebate?
The GST/HST New Housing Rebate calculations vary by province since they have various maximum amounts and tax rates.
In Ontario, you must file the new housing rebate application no later than 2 years after the new home closes. The maximum rebate amount for owner-built houses is higher ($24,000) if you paid the HST on the purchased land, and lower ($16,080) if you didn’t.
Here’s an example of the calculation:
Say you purchased a home for $500,000. If the builder included the HST in the purchase price, you can automatically include the purchase price and HST within your mortgage. Otherwise, you’ll pay the province’s HST rate (13% in Ontario) on top of the purchase price. You can claim 36% of the GST portion of the HST rebate and 95% for the provincial portion of the HST.
In Quebec, you can receive an additional 4.9875% of the home’s purchase price, up to a purchase price of $200,000. The maximum rebate available is $9,975.
How To Apply For The GST/HST New Housing Rebate?
To apply for the GST/HST rebate, you must submit two forms: the GST190 & GST191. The GST190 is for rebate applicants with a home purchased from a builder and requires information about the claimant (applicant), house, and builder. The GST 191 is for rebate applicants with a home built by the owner.
If you live in Quebec, you must submit the FP-2190.AC-V form.
You must submit one of these forms with your income taxes within two years of your house’s house’s closing date.
Other Provincial New Housing Rebate For Owner-Built Houses
Various provinces have different parameters for the GST/HST New Housing Rebate. The provinces’ different tax rates make the calculation slightly different from each other.
Nova Scotia New Housing Rebate
The HST rate in Nova Scotia is 15%, made up of a 5% GST and 10% PST. Nova Scotia residents can receive a 36% rebate for the HST portion of HST, at a maximum amount of $6,300. In Nova Scotia, you can receive an 18.75% rebate on the PST portion up to a maximum of $3,000.
Ontario New Housing Rebate
The HST rate in Ontario is 13%, made up of a 5% GST and 8% PST. Ontarians can receive a 36% rebate for the HST portion of HST, at a maximum amount of $6,300.
Ontarians can receive a 75% rebate for the PST portion, at a maximum of $24,000 if you paid for HST on the property. If you didn’t pay for HST on the property, the maximum is $16,080.
British Columbia New Housing Rebate
Similar to Ontario, BC rebate applicants can receive 36% of the GST portion of their HST, up to a maximum of $6,300. Tax rates in B.C. are 7% for GST and 5% for PST. However, B.C. residents can only receive the PST rebate if the home was purchased or transferred after April 1, 2013. If you purchased a home after this date, the B.C. Transition Tax Rebate will help compensate you.
Saskatchewan New Housing Rebate
Saskatchewan applicants can receive 36% of the GST portion of their HST, up to a maximum of $6,300. The tax rate in Saskatchewan for GST is 5%, while the PST is 6%.
Saskatchewan residents can receive a 42% PST rebate if the property price was under $350,000. The higher the purchase price, the lower the rebate rate, and properties priced at or over $450,000 aren’t eligible for PST rebates.
Quebec New Housing Rebate
The GST and QST in Quebec are 5% and 9.975% respectively.
Quebec applicants can receive 36% of the GST portion of their HST, up to a maximum of $6,300. The tax rate in Quebec for GST is 5%, while the PST is 9.975%. Quebec residents can receive a PST rebate of 50% for properties priced under $200,000, up to a maximum of $9,975. The rate goes lower for properties priced over $200,000, and no PST rebate is available for Quebec houses priced at $300,000.
Rest Of Canada: New Housing Rebate
For the rest of Canada, you can receive a rebate for 36% of the GST tax, up to a maximum of $6,300, without any official PST rebates. Some provinces have provincial rebates that can assist with the lack of a PST rebate.
Buying a home is an expensive and stressful process. Although every cost adds up, you can find some relief with the GST/HST New Housing Rebates.
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