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GST/HST on your new home purchase

If you buy or build a brand new home or condo, you need to pay the federal goods and services tax (GST) on the purchase price – or the harmonized sales tax (HST), if you live in a province that has it.

For example, if you bought a brand new condo in Vancouver for $500,000, your GST would be calculated as:

   $500,000 (purchase price)

x 5% (GST in BC)

= GST on new home purchase: $25,000 

If you bought a brand new condo of the same price in Toronto, your HST would be calculated as:

  $500,000 (purchase price)

x 13% (HST in ON)

= HST on new home purchase: $65,000 

Now, there’s one of two ways you’ll have to pay this: with cash on closing day, or through your mortgage. If the builder has included the GST/HST in the purchase price, then it’ll automatically be included in your mortgage. But if the sign says “$500,000 + HST”, you need to be prepared to pay for the tax up front.

GST/HST new housing rebate

Fortunately, no matter where you live in Canada, if your new home is priced below $450,000 before GST/HST, you may be eligible for a partial rebate of the 5% GST portion.

The GST/HST New Housing Rebate amount changes on a sliding scale, depending on the purchase price of your home. For example, if it was priced at $350,000 or less, your GST might be reduced to just 3.5%. The only catch – the home must be your primary residence.

To claim the rebate, fill out Form GST190 and file it with your personal income tax.

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