Your First Home in Canada: How to Claim the GST Rebate with Confidence



Your First Home in Canada: How to Claim the GST Rebate with Confidence

Buying your first home in Canada is an exciting milestone — but it also comes with many costs. One way first-time home buyers can save thousands is by claiming the GST/HST New Housing Rebate. This rebate allows eligible buyers to recover some of the federal portion of the Goods and Services Tax (GST) or the Harmonized Sales Tax (HST) paid on the purchase price of a qualifying new or substantially renovated home.

In this blog, we’ll walk you through everything you need to know about the rebate, including eligibility, qualified homes, how much you can claim, how to apply, and what to watch out for.




1. Eligibility Criteria: Are You a First-Time Buyer Under CRA Rules?

Before applying for the GST rebate, it’s important to determine if you meet the Canada Revenue Agency’s (CRA) definition of a first-time home buyer and other criteria.

  • Occupancy Requirement: You (or a close relative such as a spouse, common-law partner, or child) must intend to use the home as your primary place of residence.
  • Buyer Status: While being a "first-time buyer" isn’t a requirement for the GST rebate itself (unlike other programs like the First-Time Home Buyer Incentive), the home must be purchased from a builder or substantially renovated.
  • GST Paid: You must have paid GST/HST on the home, which typically applies to new constructions or major renovations, not resale homes.



2. What Types of Homes Are Eligible for the GST Rebate?

Not all properties qualify. To claim the GST rebate, your home must fall into one of the following categories:

  • Newly Built Homes: Purchased from a builder for residential use.
  • Substantially Renovated Homes: At least 90% of the interior must have been renovated to qualify.
  • Manufactured or Mobile Homes: Including modular homes purchased for personal occupancy.
  • Owner-Built Homes: If you constructed or substantially renovated the home yourself, you may be eligible for a partial rebate on materials and services.

In addition, land leases, co-operative housing, and condominiums may also qualify if other conditions are met.




3. Rebate Amounts Based on Home Purchase Price

The amount of the GST rebate depends on the purchase price or fair market value (FMV) of the home:

  • Full GST Rebate: Available if the home is priced $350,000 or less (before tax). Buyers can receive up to 36% of the GST paid.
  • Partial Rebate: Available for homes priced between $350,000 and $450,000. The rebate decreases gradually as the price increases.
  • No Rebate: Homes with a purchase price above $450,000 do not qualify for any GST rebate.

For homes in provinces that harmonize their provincial sales tax with the GST (such as Ontario), there may also be provincial rebates that follow similar thresholds.




4. How to Apply: Step-by-Step Process to Submit Your Rebate Claim

To claim the GST rebate, you must follow the CRA’s application process. Here’s what you need to do:

  1. Complete the Right Form:
    • For purchases from a builder, use Form GST190 – “GST/HST New Housing Rebate Application for Houses Purchased from a Builder.”
    • For owner-built homes, use Form GST191.
  2. Gather Supporting Documents:
    • Sales agreement or invoice showing GST/HST paid.
    • Proof of occupancy (e.g., utility bills or property tax statements).
    • Any builder-signed forms required for your rebate category.
  3. Submit Your Application:
    • The rebate application must be submitted within two years of the date you take possession or ownership.
    • You can mail the form to the CRA Sudbury Tax Centre or submit it with your tax return if applicable.




5. When and Why Your Claim Might Be Denied

Even eligible buyers can be denied if mistakes are made. Common reasons include:

  • Missing Documents: Incomplete applications are often rejected due to missing invoices or proof of occupancy.
  • Incorrect Property Type: Submitting a rebate for a resale home (not eligible) or a rental property may result in a denial.
  • Occupancy Rules Not Met: If you never lived in the home, the CRA may determine you're ineligible.

If your claim is denied, you may receive a letter explaining why. You can often correct and resubmit the application, or file a notice of objection if you disagree with the decision.

Final Thoughts

Understanding and applying for the GST New Housing Rebate can save you thousands of dollars when buying your first home. By knowing what homes qualify, how much you can claim, and how to avoid common mistakes, you’ll be better prepared to navigate the process confidently.

If you're planning to buy a new home or have recently purchased one, it’s worth reviewing your eligibility and submitting your rebate application on time — your wallet will thank you!