GST on New Homes in BC: What Buyers Need to Know

Buyers often assume that GST is already included in the advertised price of a new home in British Columbia. Sometimes it is—but in many builder and presale contracts, GST is payable in addition to the purchase price.

On a high-priced home, that difference can add tens of thousands of dollars to the funds needed at completion. Buyers should confirm the contract wording, available rebates, and their personal eligibility before signing or removing conditions.

When Does GST Apply to Real Estate in BC?

GST is a federal tax charged at 5% in British Columbia. It commonly applies to:

• Newly built homes purchased from a builder

• Presale condos and townhouses

• New custom homes

• Homes that have been substantially renovated

• Certain owner-built homes

• Some assignments, vacant land, and properties used in commercial activity

Most ordinary used residential resale homes are exempt from GST, but there are exceptions. A property’s age alone does not determine the answer. Its construction history, previous use, seller’s activities, occupancy, and contract terms can all matter.

How Much GST Could a Buyer Pay?

If GST is payable in addition to the price, the basic calculation is 5% of the taxable amount:

• $600,000 new home: $30,000 GST

• $800,000 new home: $40,000 GST

• $1,000,000 new home: $50,000 GST

• $1,250,000 new home: $62,500 GST

These are gross-tax examples before any rebate and assume the entire stated amount is taxable. Builder contracts may calculate tax differently when upgrades, assignment amounts, credits, or other charges are involved.

Is GST Included in the Builder’s Price?

Never assume. The purchase agreement should state whether the price:

• Includes GST

• Excludes GST and requires the buyer to pay it in addition

• Includes GST after crediting an assumed rebate to the builder

A marketing price advertised as “net of rebate” may assume the buyer qualifies for a rebate and assigns it to the builder. If the buyer does not qualify, the contract may require the buyer to repay that rebate amount or provide additional funds at completion.

Ask a lawyer and tax professional to review the tax clause and calculate the full cash requirement during the applicable cancellation or subject period.

First-Time Home Buyers’ GST/HST Rebate

Canada’s First-Time Home Buyers’ GST/HST Rebate can provide significant relief for eligible buyers of newly built or substantially renovated homes used as their primary residence.

For qualifying homes:

• Up to $1,000,000: eligible first-time buyers may recover 100% of the GST, up to $50,000

• Over $1,000,000 and below $1,500,000: the rebate is gradually reduced

• $1,500,000 or more: no first-time-buyer rebate is available

For example, an eligible first-time buyer purchasing a qualifying $1,250,000 home may receive a rebate of up to $25,000, representing the midpoint of the phase-out. The gross GST would be $62,500, so the buyer must still plan for the unrecovered portion and confirm how the contract handles the rebate.

Review the CRA First-Time Home Buyers’ GST/HST Rebate

Who May Qualify as a First-Time Buyer?

For this federal rebate, an individual generally must:

• Be at least 18 years old

• Be a Canadian citizen or permanent resident

• Not have lived in a home they or their spouse or common-law partner owned in the current calendar year or previous four calendar years

• Not have previously received this first-time-buyer rebate

The buyer must meet the definition at the date specified for the type of transaction. For a home bought from a builder, this is generally when ownership is transferred.

The qualifying home must be newly built or substantially renovated, be intended as the buyer’s primary place of residence, and meet the occupancy and other program requirements.

Important Agreement and Construction Dates

Timing rules apply. Under current CRA guidance for a house and land purchased from the same builder, eligibility generally requires:

• An agreement of purchase and sale entered into with the builder on or after March 20, 2025, and before 2031

• Construction or substantial renovation beginning before 2031

• The home being substantially completed before 2036

• Ownership transferring before 2036

Different transaction types—including leased land, owner-built homes, co-operative housing, and assignments—have additional or different conditions. Confirm the exact rule that applies to your purchase.

Need Help Comparing a Builder’s Real Cost?

The lowest advertised price is not always the lowest total cost. I can help you compare base prices, included features, incentives, parking, upgrades, estimated strata fees, Property Transfer Tax, and potential GST exposure before you register at a sales centre.

Call or text Ilona Crane at 604-377-9209 before your first builder visit.

The Existing GST/HST New Housing Rebate

Canada also has an existing GST/HST New Housing Rebate for qualifying homes used as the purchaser’s or a relation’s primary place of residence. Under the traditional federal program, the rebate is generally available in full for eligible homes priced at $350,000 or less, reduced between $350,000 and $450,000, and eliminated at $450,000.

Because many BC homes exceed those thresholds, the existing rebate alone often provides no benefit to Lower Mainland buyers. The newer first-time-buyer rebate can provide a top-up where both programs apply and extends potential relief to eligible homes valued below $1.5 million.

Review the CRA GST/HST New Housing Rebate

How Is the Rebate Received?

Depending on the contract and program, the rebate may be:

• Credited by the builder on completion after the buyer assigns the rebate; or

• Paid by the buyer first and claimed directly from the Canada Revenue Agency afterward

An assignment to the builder does not guarantee eligibility. The buyer remains responsible for meeting the program conditions. If the CRA later determines that the buyer did not qualify, the buyer may face repayment, interest, or other consequences depending on the arrangement.

Application deadlines apply—often within two years of taking ownership or completing construction, depending on the rebate and transaction. Buyers should obtain tax advice and keep the purchase agreement, statement of adjustments, invoices, occupancy documents, and proof of payment.

Primary Residence Versus Rental Property

The owner-occupied new-housing rebates have primary-residence requirements. A buyer intending to rent the property may not qualify under the same program.

A separate GST/HST New Residential Rental Property Rebate may apply to certain qualifying rental homes. Its eligibility, lease, occupancy, fair-market-value, construction, and filing rules differ from the owner-occupied programs.

Changing the plan from personal occupancy to renting before completion can affect rebate eligibility and the amount due to the builder. Discuss any change with the builder, lawyer, mortgage professional, insurer, and tax adviser immediately.

GST on Presale Assignments

An assignment occurs when the original presale purchaser transfers their contract rights to another buyer before completion. GST may apply to the assignment transaction as well as to the completed home, and the tax treatment can depend on the consideration, deposits, and transaction structure.

An assignee’s eligibility for the first-time-buyer rebate may also depend on the date of the original builder agreement—not only the date of the assignment. Never calculate an assignment’s cost using only the original purchase price and assignment profit.

Both assignor and assignee should obtain independent legal and tax advice before entering an assignment agreement.

GST and Substantially Renovated Homes

A resale-looking home can become taxable if it has been substantially renovated under the Excise Tax Act. This is a technical test and generally requires much more than ordinary updating or cosmetic renovation.

Flipped homes, rebuilt interiors, converted properties, and homes sold by builders or businesses deserve careful review. The Contract of Purchase and Sale should clearly address whether GST is included, excluded, or not applicable and who bears the risk if the tax authority later disagrees.

GST Is Different From Property Transfer Tax

GST and BC Property Transfer Tax are separate:

• GST: federal tax that may apply to new, substantially renovated, and certain other taxable real estate

• Property Transfer Tax: BC tax generally payable when an interest in property is registered at the Land Title Office

A buyer may have to pay both taxes on the same purchase. Separate exemptions and rebates apply, each with its own definitions and requirements.

Financing the GST

Do not assume the mortgage will automatically cover GST. Whether GST is included in the lender’s value and financing depends on the contract, appraisal, loan program, rebate assignment, and lender policy.

If the rebate is not credited at completion, the buyer may need to provide the full GST amount in cash and wait to receive an approved rebate later. Mortgage approval obtained years before a presale completes may not account for the final tax and adjustment amounts.

Ask the mortgage professional to calculate the buyer’s total cash requirement using the actual contract—not just the advertised base price.

GST Questions to Ask Before Signing

• Is GST included in or added to the purchase price?

• Does the quoted price assume a rebate?

• Which rebate is assumed and who will apply?

• Must the buyer assign the rebate to the builder?

• What happens if the buyer does not qualify?

• Are upgrades, parking, storage, and assignment amounts taxable?

• How much cash will be required at completion?

• Does the lender’s approval include GST?

• Will the home be used as a primary residence or rental?

• What application deadline and documentation requirements apply?

Buying a New Home in South Surrey, White Rock, or Langley?

A builder’s advertised price may not show the full amount required to complete. Before registering or signing, make sure you understand GST, Property Transfer Tax, deposits, upgrades, incentives, strata fees, and financing.

Contact Ilona before visiting a presentation centre. I can help you compare developments, identify questions, review the buying process, and coordinate with qualified legal, mortgage, and tax professionals.

Ilona Crane, REALTOR®
Royal LePage Wolstencroft Realty
Serving South Surrey, White Rock, Langley, Cloverdale, Surrey, and the Lower Mainland
Call or text: 604-377-9209
Email: soldbyilona@gmail.com
Website: soldbyilona.com

This article provides general information only and is not legal, tax, accounting, mortgage, or GST advice. GST rules, rebate amounts, eligibility requirements, dates, and application procedures can change. Buyers should obtain written advice from qualified legal and tax professionals based on the actual contract and intended use of the property.