If you’ve purchased a newly built home or substantially renovated a home in Ontario, you might be eligible for the GST/HST New Housing Rebate. This rebate is a federal program that refunds a portion of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) paid on a new home purchase or major renovation. For Ontario residents, this new home tax rebate can significantly reduce the cost of buying a new house or condo – often saving buyers tens of thousands of dollars. In fact, many homeowners miss out on this rebate simply because they are unaware they qualify.
In this post, we’ll explain what the rebate is, who is eligible, how rebate amounts are calculated, how to apply (including forms and documentation), common mistakes to avoid, tips to maximize your rebate, and any recent updates.
What is the GST/HST New Housing Rebate?
The GST/HST New Housing Rebate is designed to help homebuyers recover some of the federal and provincial sales tax paid on a new home purchase or a substantial home renovation. It allows individuals (not corporations or partnerships) to get back a portion of the GST or the federal part of the HST paid for a new or substantially renovated house that will be used as their primary place of residence.
In Ontario (which charges 13% HST on most new homes), the rebate includes both a federal portion (for the 5% GST part of HST) and a provincial portion (for the 8% Ontario part of HST). This means Ontario residents can potentially reclaim a significant amount of the HST they paid on a new home purchase, making homeownership a bit more affordable.
Who is Eligible for the Rebate?
To qualify for the GST/HST New Housing Rebate in Ontario, you must meet these criteria:
1. The Home Must Be New or Substantially Renovated
- Eligible properties include newly constructed houses, condominium units, townhouses, mobile homes, and floating homes etc.
- If you substantially renovated an existing home, you may also qualify.
2. The Home Must Be Your Primary Residence
- The rebate applies only if you or an immediate family member intend to live in the home as a primary residence.
- Investment properties and homes purchased solely for resale (house flipping) are not eligible for this rebate. Instead, a separate rebate program exists for rental properties.
3. The Home Must Be Located in Ontario
- The property must be situated in Ontario to qualify for the provincial rebate.
4. The Purchase Price Must Meet Federal Rebate Limits
- If the home price is $450,000 or more, you will not qualify for the federal portion of the rebate.
- The Ontario portion of the rebate does not have a maximum home value limit, meaning you can still get a rebate even if your home costs more than $450,000.
How Much is the Rebate Worth?
Federal GST Portion Rebate (5% of HST)
- You can claim 36% of the 5% GST portion of HST, up to a maximum of $6,300.
- If your home costs $450,000 or more, you will not receive the federal rebate.
Ontario Provincial Portion Rebate (8% of HST)
- You can claim 75% of the 8% Ontario portion of HST, up to a maximum of $24,000.
- Unlike the federal rebate, the Ontario rebate is available for all home prices, even if your home costs over $450,000.
Total Possible Rebate in Ontario
- Maximum federal rebate: $6,300
- Maximum Ontario rebate: $24,000
- Total possible rebate: $30,300
How to Apply for the GST/HST New Housing Rebate in Ontario
Follow these steps to claim your rebate:
- Determine if Your Builder Already Claimed the Rebate
- Many builders include the rebate in the purchase price and claim it on your behalf.
- Check your purchase agreement to see if the rebate was deducted upfront.
- Obtain the Necessary Forms
- Purchased from a Builder: e.g Form GST190, Form RC7190-ON
- Owner-Built Home or Major Renovation: e.g Form GST191, Form RC7191-ON.
- Gather Supporting Documents
- Agreement of Purchase and Sale (from the builder)
- Closing Statement from Your Lawyer
- Proof of Occupancy (e.g., property tax bill, utility bill)
- Invoices/Receipts for Renovations or Construction Costs (if applicable)
- Complete the Forms Carefully
- Ensure all details match your documents to avoid processing delays.
- Submit Your Application
- Applications must be submitted within two years of your home closing or renovation completion date.
- You can submit via mail or through the CRA’s online portal.
- Receive Your Rebate
- CRA typically processes claims within a few months, and rebates are issued via cheque or direct deposit.
Common Mistakes to Avoid
- Missing the filing deadline (must apply within two years).
- Not claiming upgrades (custom finishes, appliances, and additions also qualify).
- Incorrect occupancy information (home must be a primary residence).
- Incomplete documentation (missing purchase agreements, invoices, or proof of residence).
Tips to Maximize Your Rebate
- Apply as soon as possible to avoid delays.
- Keep all receipts and invoices for renovations or upgrades.
- Include all eligible costs, including builder upgrades and added features.
- Ensure the home is your primary residence to meet eligibility criteria.
Conclusion
The GST/HST New Housing Rebate is an excellent opportunity for Ontario residents to recover a portion of the taxes paid on a new home or renovation. By understanding the eligibility criteria, knowing the rebate limits, and applying correctly, homeowners can save up to $30,300.
If you recently bought a new home or renovated one, check your eligibility and apply today to reclaim your tax savings. Don’t leave money on the table – this rebate can significantly reduce your homeownership costs!
Resources
- https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/new-housing-rebate.html
- https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4028.html
- https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4028/gst-hst-new-housing-rebate.html