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"Which homes qualify for the GST Rebate?"

"Which homes qualify for the GST Rebate?"

"With the change of GST, how does the calculation for New Housing Rebate of GST on new homes apply?"

These types of homes qualify for the Goods and Services Tax (GST) rebate:

  • a house that you built, substantially renovated or on which you built a major addition on land that you own or lease (you can do the work yourself or hire someone to do it);
  • a new mobile home (this includes a modular home) or a new floating home that you bought from a builder (this includes a vendor);
  • a new or substantially renovated house (including a condominium unit) that you bought from a builder (building and land);
  • a new or substantially renovated house that you bought where you lease the land from the builder under the same agreement to buy the house and the lease is for 20 years or more, or gives you the option to buy the land;
  • a share of the capital stock in a co-operative housing corporation (co-op) that you bought; or
  • a non-residential property that you converted into your house.

If you renovated your house, built an addition to your existing house, or converted a non-residential property into your house, see "Substantial renovation, major addition, and conversion" to determine if the work you have done is extensive enough to consider your house as new.

How do I calculate the GST?

Buyers of new or substantially renovated homes pay the GST at a rate of 5% of the property purchase price.

Buyers of new homes (the home must be their principal residence) are eligible for the New Housing Rebate, which will reduce the GST paid by 36%.

Let’s say you buy a new home for $300,000.00.

  • The GST is 5% or $15,000.00.
  • 36% x $15,000.00 is $5,400.00
  • $15,000 - $5,400 = $9,600.00 GST

Only new homes priced up to $350,000.00 are eligible for the full rebate. Home priced between $350,000 and $450,000 are eligible for a reduced GST rebate, calculated according to this formula.

Let’s say your new home cost $400,000.

The GST is 5% or $20,000 GST.

The formula is:

  • $6,300.00 X ($450,000.00 – $400,000) / $100,000.00
  • $6,300.00 x $50,000 = $3,150,000.00 / $100,000 = $3,150.00 GST rebate.
  • Total GST paid: $16,850.00.

For more information: http://www.cra-arc.gc.ca/E/pub/gp/rc4028/rc4028-e.html

For the form: http://www.cra-arc.gc.ca/E/pbg/gf/gst190/gst190-08e.pdf

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