GST/HST on Home Renovations in Canada 2025

Updated March 2025 · 10 min read

Understanding GST and HST on home renovations in Canada can save you money and prevent legal headaches. Whether you're hiring a contractor, buying materials at a hardware store, or undertaking a substantial renovation that qualifies for a rebate, knowing the rules helps you budget accurately and comply with tax law.

Does GST/HST Apply to Home Renovations?

Yes — GST or HST applies to most home renovation services and materials in Canada. When you hire a contractor to renovate your home, their labour and materials are subject to GST/HST. When you buy building materials at a hardware store, you pay GST/HST at the point of sale.

There are no general exemptions for home renovation services for personal residences. This is different from some other countries where renovation work on primary residences carries reduced tax rates — in Canada, the full GST/HST rate applies.

GST/HST on Contractor Services

Any contractor registered for GST/HST (which is required for businesses with annual revenues over $30,000) must charge and remit GST/HST on their services. This applies to:

• General contractors overseeing your renovation
• Subcontractors (electricians, plumbers, framers, etc.)
• Architects and designers
• Interior decorators
• Landscapers

The contractor's invoice should clearly show the GST/HST amount charged and their GST/HST registration number. If a contractor cannot provide a registration number, they may be unregistered (under the $30,000 threshold) — or, more concerning, may be committing tax fraud.

GST/HST on Building Materials

When you purchase building materials, fixtures, appliances, and tools at retail stores (Home Depot, Rona, local suppliers), you pay GST/HST at the standard provincial rate. There is no exemption for materials purchased for personal home renovation.

If you are acting as your own general contractor (buying materials and hiring subcontractors separately), you pay GST/HST on all materials purchased and on all subcontractor invoices.

The GST/HST New Housing Rebate

The most significant GST/HST relief available to Canadian homeowners is the New Housing Rebate, which applies in two situations:

1. New Home Purchase

When buying a newly built home, the purchase price includes GST/HST. The New Housing Rebate provides a partial refund:

• 36% of the GST paid, for homes with a purchase price under $350,000
• Phases out linearly between $350,000 and $450,000
• No federal rebate for homes priced at $450,000 or above

2. Substantial Renovation

If you undertake a "substantial renovation" of an existing home — defined by CRA as replacing 90% or more of the interior of the building (excluding foundation, external walls, roof, and floors) — you may qualify for the New Housing Rebate on the GST/HST paid on the renovation.

This is a high bar — a kitchen and bathroom update does not qualify. It applies to near-complete gut renovations where the home is essentially rebuilt. The same purchase price thresholds apply: based on fair market value after renovation under $350,000 for full rebate, phasing out to $450,000.

Owner-Built Homes

If you build your own home (acting as your own general contractor on land you own), you may qualify for the Owner-Built Homes New Housing Rebate. The same 36%/phase-out rules apply, based on the fair market value of the completed home. You must apply within two years of the home being first occupied.

Provincial HST Rebates

In HST provinces (Ontario, Nova Scotia, New Brunswick, Newfoundland, PEI), additional provincial HST rebates may apply on top of the federal rebate:

• Ontario: Provincial new housing rebate of 75% of the provincial portion (8%) of HST, up to $24,000, for new homes under $400,000 (no phase-out — full rebate up to $400K, then the rebate remains at $24,000 above that)
• Other HST provinces have their own provincial rebate structures — check the CRA website for your province

How to Claim the New Housing Rebate

1. Complete CRA Form GST190 (New Housing Rebate Application for Houses Purchased from a Builder) or Form GST191 (for owner-built or substantially renovated homes)
2. Submit within two years of the qualifying event (possession date or first occupancy)
3. For new home purchases, builders typically handle the rebate on your behalf and reduce the purchase price accordingly — confirm this with your builder
4. Keep all invoices, contracts, and documentation of costs

Quebec: QST on Renovations

Quebec does not participate in the HST framework. Quebec charges the federal GST (5%) plus its own Quebec Sales Tax (QST) at 9.975% — effectively a combined rate of 14.975% on taxable renovation services and materials in Quebec. The federal New Housing Rebate applies in Quebec; Quebec also has its own QST new housing rebate (TVQ rebate) administered by Revenu Québec.