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Cost of Buying | Tax

GST on a New Home

The single largest cost most buyers of a new home fail to budget for, because the list price does not include it and most listings say so only in the fine print.

The short answer

GST at 5% applies to a newly built home and is normally added on top of the list price. A used residential home is exempt. Two rebates can reduce it: the first-time home buyers' rebate, which is new and generous, and the older GST new housing rebate for everyone else.

What you pay on a $1,200,000 newly built home

List price $1,200,000
GST at 5% Normally added on top. A rebate may reduce it on qualifying purchases. $60,000
Property transfer tax Full tax before exemptions would be $22,000. $22,000
Before legal fees and adjustments $1,282,000

Legal fees, title insurance, and closing adjustments are extra. Rebate eligibility depends on your circumstances, so confirm it with the Canada Revenue Agency or your lawyer before relying on it.

Why it applies at all

GST is charged on new goods, and a newly built home is a new good. A used residential home is exempt, which is why this cost appears only on the new side of the market.

Because it is a tax rather than part of the price, it usually sits outside the number on the listing. That is the trap: a buyer works out what they can afford against a list price and then discovers five percent sitting on top of it.

Check the contract, not the listing

Some contracts state a price with GST included and some do not. Most in this market do not. The listing may say either, or nothing at all.

This is a question to get answered in writing before you make an offer, not something to establish afterwards. The data block below shows how the active market splits on it.

The two rebates

The first-time home buyers' GST rebate is the newer and far larger one. It can recover the entire GST on a home at or below one million dollars, to a maximum of fifty thousand dollars, reducing to nothing at one and a half million.

The older GST new housing rebate is available to buyers who are not first-time buyers and is much smaller, with thresholds that have not moved with this market. Both have conditions, and both are worth confirming with the Canada Revenue Agency or your lawyer rather than assumed.

Read next

First-Time Buyer GST Rebate
The First-Time Home Buyers' GST Rebate
Property Transfer Tax
Property Transfer Tax in BC

Common questions

Do you pay GST on a new home in BC?

Yes, at 5%, and it is normally added on top of the list price rather than included in it. A used residential home is exempt from GST, which is why this only affects the new-build side of the market.

Is GST included in the listing price?

Usually not in this market, and the only reliable answer is the contract. Get it in writing before you offer. Some listings state it either way and many state nothing at all, which is not the same as it being included.

Can I add the GST to my mortgage?

It forms part of the purchase price for financing purposes, so it affects both the amount you borrow and the down payment you need. Confirm the treatment with your broker on the specific purchase, because it changes how much cash you need at closing.

Which rebate applies to me?

If you meet the first-time buyer conditions, that rebate is far more generous and is the one to look at first. If not, the older GST new housing rebate may apply. Both have conditions best confirmed with the CRA or your lawyer.

Where these figures come from

Work the numbers on a real home

Every figure here comes from government sources and from listings you can open. Search the market and check the costs against a specific price rather than a hypothetical one.

Search homes for sale See the monthly carrying cost