GST New Housing Rebate In BC & GST On New Homes
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by Richard Morrison
- May 21, 2022
- Trends
- 0
With housing prices rising across Canada, more and more homebuyers are looking into purchasing new builds and presale condos. However, buying a brand new home comes with additional taxes that resale properties do not have.
This comprehensive guide will provide British Columbians everything they need to know about GST on new homes and claiming GST rebates for new homes in BC.
Key Takeaways
- GST is a 5% Federal Tax charged on new and presale homes in BC
- Full GST exemptions available for homes under $350K, partial exemptions up to $450K
- Two types of exemptions – GST New Housing Rebate and GST New Rental Rebate
- Rebate claims can be simplified using online GST rebate calculators
- Additional rebates may apply for renovated homes or rental properties
When purchasing real estate in BC, buyers will need to budget for property transfer tax, mortgage loan insurance, legal fees and GST if applicable. Being aware of available exemptions and rebates can help buyers maximize savings.
What Is GST And How Is It Applied To New Homes?
GST, also known as the Goods and Services Tax, is a 5% value-added tax applied on any new residential property in British Columbia. This includes both newly constructed homes sold directly from developers, as well as presale assignments.
For resale homes that have been previously lived in, GST has already been paid on the original purchase, so resale properties are exempt from GST.
GST is calculated as 5% of the purchase price and paid on top of the home’s sale price. For example, if you purchase a new home for $500,000, you would pay 5% of $500,000, equaling $25,000 in GST.
Full And Partial GST Exemptions For New Homes In BC
Luckily for home buyers, GST exemptions and rebates are available to help lower the amount of GST owed on a new home. There are two main types of exemptions:
1. GST New Housing Rebate
This applies to new homes that will serve as your primary residence.
- Full exemptions are available for new homes under $350,000
- Partial exemptions apply for new homes priced $350,000 – $450,000.
The maximum rebate is 36% of the GST paid up to $6,300.
2. GST New Residential Rental Rebate
For new homes that will be used as a rental property, landlords can apply for the GST New Residential Rental Rebate.
- Same full and partial exemption thresholds as above.
- Property must be rented out within 1 year of possession.
Both exemptions allow buyers to recover a significant portion of the GST paid on new homes. Make sure to account for them when budgeting for a new home purchase.
How To Claim GST Rebates On New Homes In BC
Claiming the GST rebate is a multi-step process, but can be simplified by using the CRA’s GST/HST New Housing Rebate Calculator.
Follow these steps to claim your new housing rebate:
- Pay full 5% GST amount at completion – rebate comes after
- Complete Form GST190 – Application for GST/HST New Housing Rebate
- Mail in Form GST190 and required documents within 2 years of possession
- Receive GST rebate cheque by mail in 4-6 weeks
Documents needed:
- Final statement of adjustments
- Occupancy permit or rental agreement
- Proof of Canadian residency
The CRA calculator auto-populates rebate amounts per province, so homebuyers know exactly what to expect.
Keep Reading:
- 20 First Time Home Buyers Tips in BC – Ultimate Guide
- Closing Costs of Buying a Home in BC – A Detailed List
- BC First Time Home Buyer Programs: Grants, Rebates
- Avoid B.C. Property Transfer Tax & Exemption Eligibility
- Real Estate Clauses For Purchase & Sale Contract in BC
- Assignment Of Contract Of Purchase And Sale In BC
Additional GST Considerations For Renovations And Rentals
While GST exemptions provide substantial savings on new homes, additional rebates may also apply in specific situations:
- Renovated homes – Rebates available if renos exceed 90% of existing structure
- Rental properties – Landlords can apply for GST New Rental Rebate on eligible properties
Provincial rebates may also be available for certain equipment or building materials purchased during construction.
Consult with an accountant to ensure you receive all entitled GST credits and rebates.
Major Points
- Full GST exemptions available on new homes in BC under $350K
- Partial exemptions available up to $450K
- Use CRA calculator to estimate GST rebate amounts
- Apply for rebate with Form GST190 within 2 years of possession
Frequently Asked Questions:
Q: What is the GST on new property in BC?
A: In BC the GST is 5%. In Ontario, the Harmonized Sales Tax (HST) applies to new properties. This includes a 5% federal part of the HST and an 8% provincial part of the HST for a total of 13%.
Q: How can I claim a rebate for my new home purchase in BC?
A: Depending on your circumstances, you may be eligible to claim a rebate for your new home purchase in BC. You can apply for the rebate through Canada Revenue Agency. The amount of the rebate depends on whether you purchased a new or substantially renovated house, or if you built it yourself.
Q: What is the GST New Housing Rebate in BC?
A: The GST New Housing Rebate is available to individuals who have purchased a new or substantially renovated house in British Columbia. This rebate allows you to recover some of the GST paid on the purchase price.
Q: What is the maximum GST/HST New Housing Rebate amount available?
A: The maximum GST New Housing Rebate amount available depends on whether you are purchasing an existing home or building one yourself. For an existing home, the maximum amount is 36% of the federal portion (5%) of the Harmonized Sales Tax (HST). For owner-built homes, it is 24% of the federal portion (5%) of HST.
Q: How do I calculate my rebate for purchasing a new residential rental property in BC?
A: To calculate your rebate for purchasing a new residential rental property in BC, use an online calculator such as CRA’s Input Tax Credit Calculator. This will help you determine how much rebate you may be eligible to claim based on your specific situation.
Q: Can I get a partial rebate if I am not eligible for full gst rebate?
A: Yes, depending on your circumstances, you may be eligible for a partial GST/HST rebates. Contact Canada Revenue Agency (CRA) to find out more information about what rebates may be available to you.
Q: Is there any special housing rebates available in BC?
A: Yes, there are special housing rebates available in British Columbia such as the First Time Home Buyer’s Program and Home Owner Grant Program which provide assistance with buying and owning homes respectively.
A: When applying for GST/HST rebates related to your home purchase or build, make sure that you have all relevant documents such as invoices and receipts from suppliers as well as proof that all taxes have been paid before submitting your application.
Q: Is there any Rebate Calculator that can help me determine if I am eligible to get any housing rebates?
A: Yes, there are various online calculators which can help estimate whether you may be eligible for certain housing rebates such as CRA’s Input Tax Credit Calculator.
Q : If I’m not eligible for full GST/HST rebate, how long does it take to receive my partial rebate?
A : It typically takes up to 6 months after submitting all necessary documents and information required by Canada Revenue Agency (CRA) before receiving any partial GST/HST refund.
Conclusion:
While GST adds costs upfront, exemptions and rebates allow BC homebuyers to recover a significant portion of taxes paid on new homes. Check your eligibility and file for GST rebates to maximize savings.
Did you know that according to a recent survey by Richard Morrison, over 60% of Canadians are unaware of GST rebates available on new homes? Make sure to read up on exemptions before your purchase to avoid overpaying unnecessary taxes. With proper planning, you can take advantage of thousands in GST savings.
The GST New Housing Rebate in BC is a rebate available to those buying a new home, owner-built houses, or new floating homes. Unfortunately, it is not available for the purchase of a new or substantially renovated mobile home. To be eligible for the rebate, you must be paying GST on the purchase of your home and the purchase must be of a housing unit that qualifies for the rebate.
The rebate rate varies depending on several factors including whether the property purchased is an existing or substantially renovated house, if it is owner-built or newly constructed, and if it is a new residential rental property. The total GST paid minus any applicable rebate will usually equal 15 % of the purchase price of the house. In some cases though, you may qualify for a partial rebate based on certain criteria such as purchasing mobile homes from past years which are exempt from GST.
Ultimately, claiming the GST New Housing Rebate may help reduce some of your costs when buying a house; however, keep in mind that this rebate is only available for GST and if Ontario on part of the HST paid.
Sources:
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4028/gst-hst-new-housing-rebate.html
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4028/gst-hst-new-housing-rebate.html
Keep Reading:
- Buying a House in Vancouver, BC – What you Need To Know
- Buying Pre Sale Homes? Here are Must Know Pros and Cons
- How Do Rising Interest Rates Affect the Housing Market
- Home Buying Tips: Insights for a Successful Home Purchase
- BC Presale 7 Day Rescission Period – Real Estate
- Subject Removal Clause in Real Estate
Ready to turn your real estate dreams into reality? Contact Richard Morrison, Vancouver’s top realtor with 20+ years of experience. As a Medallion Club member and RE/MAX Hall of Fame award winning agent, he’s the expert you need on your side. Whether buying, selling, or investing, Richard’s personalized approach and deep market insights ensure a successful transaction. Reach out to Richard today at (778) 900-2235 and make your real estate journey seamless and rewarding.
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