The GST/HST New Housing Rebate is one of the most significant tax rebates available to Canadian homebuyers and homeowners. It allows you to recover a portion of the GST or HST paid when purchasing a new home or undertaking a substantial renovation. Understanding how the rebate works — and how to claim it — can put thousands of dollars back in your pocket.
When you buy a newly built home from a builder in Canada, the purchase price includes GST (or HST in participating provinces). The New Housing Rebate partially offsets this tax burden for buyers of more affordable homes.
The rebate applies to:
The federal portion of the New Housing Rebate is calculated as follows:
Rebate = 36% × GST paid = 36% × (5% × purchase price)
Maximum rebate = $6,300 (which is 36% × 5% × $350,000)
The rebate phases out linearly. Formula:
Rebate = $6,300 × ($450,000 − purchase price) ÷ $100,000
Examples:
| Purchase Price | Federal Rebate |
|---|---|
| $300,000 | $5,400 (36% × $15,000 GST) |
| $350,000 | $6,300 (maximum) |
| $400,000 | $3,150 (50% phase-out) |
| $425,000 | $1,575 (75% phase-out) |
| $450,000+ | $0 (no rebate) |
In Ontario, where the HST rate is 13% (5% federal + 8% provincial), there is also a provincial portion of the New Housing Rebate:
Ontario example — $500,000 new home:
| Province | HST Rate | Provincial Rebate |
|---|---|---|
| Ontario | 13% | 75% of provincial portion, max $24,000 |
| Nova Scotia | 15% | 18.75% of purchase price, max $3,000 (primary residence) |
| New Brunswick | 15% | Provincial portion rebate — check CRA for current rules |
| Newfoundland | 15% | Provincial portion rebate — check CRA for current rules |
| PEI | 15% | Provincial portion rebate — check CRA for current rules |
| BC | 12% | BC has its own new housing rebate — check BC government |
If you build your own home by hiring contractors (acting as your own general contractor rather than buying from a builder), you can claim the New Housing Rebate on the GST/HST paid on construction costs. Key rules:
A "substantial renovation" — where 90%+ of the interior of an existing home is removed or replaced — qualifies for the same New Housing Rebate rules as a new home. This is a very high threshold in practice. The fair market value of the home after renovation determines eligibility and rebate amount, using the same $350,000/$450,000 thresholds.
For most new home purchases, the builder assigns the rebate to themselves in exchange for reducing the purchase price by the rebate amount. This means the price you see is typically the after-rebate price for eligible homes. Confirm with your builder whether the advertised price includes or excludes the GST/HST rebate — this distinction matters significantly for your budget.
If the builder didn't assign the rebate (which can happen with some transactions), or for owner-built homes:
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