If You Own a Home · 🇨🇦 Canada

GST/HST New Housing Rebate — For New Builds, Substantial Renovations, and First-Time Buyers

Difficulty Intermediate Applies To All Provinces & Territories Last Updated 2026-03-13

Overview

Most Canadians know they pay GST or HST on a new home. Far fewer know they can get a significant portion of it back. There are two distinct rebates available:

  1. First-Time Home Buyers’ GST/HST Rebate — A major new benefit introduced in December 2024 allowing first-time buyers of new homes priced up to $1 million to recover up to $50,000 in GST/HST.
  2. GST/HST New Housing Rebate for Substantial Renovations — A rebate for homeowners who gut and substantially renovate an existing property to use as their principal residence.

Part 1 — First-Time Home Buyers’ GST/HST Rebate (New as of December 2024)

Effective for qualifying purchases after December 31, 2024:

  • Applies to first-time buyers of newly constructed homes (or homes that have been substantially renovated)
  • Home must be used as your principal residence
  • Purchase price must be $1,000,000 or less
  • Rebate: full GST relief on qualifying purchases (removing the GST effectively reduces the purchase price by 5%)
  • In HST provinces, the provincial component has its own rebate structure

”First-time buyer” definition

You have never owned a home used as your principal residence — or if you have, you have not owned one for the past 4 years and are buying with a current spouse/partner who also qualifies.

Part 2 — Substantial Renovation Rebate

If you have gutted and rebuilt at least 90% of the interior of an existing home to use as your principal residence, you may qualify for the standard New Housing Rebate:

  • Federal portion: Rebate of up to 36% of the 5% GST, capped at $6,300
  • Provincial portion: Additional rebates in HST provinces (e.g., Ontario new housing rebate can be substantial on the 8% provincial component)
  • Application filed using Form GST191 (New Housing Rebate Application)

What “substantial renovation” means

At least 90% of the interior must be removed or replaced — keeping only the foundation, exterior walls, floor/ceiling joists, and roof. This is a genuinely high threshold — a full gut renovation, not a kitchen-and-bath remodel.

How to Apply

  1. Complete Form GST191 (Rebate Application for Owner-Built Homes) or your builder may apply on your behalf at closing (in which case the rebate is reflected in your purchase price)
  2. If self-applying: submit within 2 years of the construction/renovation being substantially complete
  3. Attach supporting documentation: purchase agreement, construction invoices, proof of GST/HST paid, evidence the home is your principal residence

What Most People Don’t Know

  • The first-time buyer rebate as of December 2024 is brand new and very large. Full GST relief on a $750,000 home saves $37,500 — a change from the previous regime where rebates phased out above $450,000 and disappeared entirely above $484,500 for new builds.
  • The substantial renovation rebate is rarely claimed. Most homeowners doing major renovations don’t know it exists. If you are doing a full gut renovation, this rebate is worth up to $6,300 federally plus provincial amounts.
  • Ontario stacks a significant provincial rebate. Ontario’s provincial new housing rebate on the 8% provincial HST component can be worth tens of thousands on eligible purchases — the combined Ontario rebate is among the most generous in Canada.
  • Builders may apply on your behalf — but you should verify. When buying a new home from a builder, the rebate is typically netted against your purchase price. Confirm this has been done correctly before closing.
  • Excise Tax Act (Canada), Section 256 — New housing rebate for owner-built homes and substantial renovations.
  • Bill C-4 (December 2024) — First-Time Home Buyers’ GST/HST Rebate, enacted December 2024.
  • CRA Form GST191 — New Housing Rebate Application.
  • CRA Publication B-092 — Substantial Renovations and the GST/HST New Housing Rebate.

Frequently Asked Questions

Does the first-time buyer GST/HST rebate apply to homes over $1 million?

The rebate introduced in December 2024 applies to new homes priced up to $1 million and phases out linearly between $1 million and $1.5 million. Homes over $1.5 million receive no rebate. Under the updated May 2025 rules, the phase-out ceiling was raised to $1.5 million — check the current CRA guidance for the exact agreement date threshold that applies to your purchase.

Will my builder automatically apply the rebate, or do I need to file for it myself?

When buying from a builder, the rebate is typically applied by the builder and reflected as a reduction in your purchase price — you do not file separately. However, you should confirm this in writing before closing. For owner-built homes and substantial renovations, you must file Form GST191 yourself within two years of substantial completion.

What exactly counts as a “substantial renovation” that qualifies for the rebate?

At least 90% of the interior of an existing home must be removed or replaced, retaining only the foundation, exterior walls, floor and ceiling joists, and roof. A kitchen and bathroom renovation, or even a full main-floor gut, does not meet this threshold — it requires a complete interior gut of the entire structure.

If I am buying with a co-purchaser who has previously owned a home, do we both lose the first-time buyer rebate?

Yes. If any purchaser on the agreement does not qualify as a first-time buyer, the entire purchase is disqualified from the first-time buyer rebate. All buyers on the title must independently meet the first-time buyer definition.

Can I claim the rebate on a home I plan to rent out rather than live in myself?

No. The first-time buyer GST/HST rebate requires the home to be used as your principal residence. A separate rebate exists for purpose-built rental housing, but the first-time buyer rebate is strictly for owner-occupiers.

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