First Time Home Buyers GST HST Rebate in Canada: A Complete Guide to the Program

Buying your first home is an exciting milestone in Canada, but the taxes and fees that come with a new home purchase can add tens of thousands of dollars to your final cost and make home ownership feel out of reach for many young Canadians. The good news is that the Canada Revenue Agency offers a special rebate program called the First Time Home Buyers GST HST Rebate that can put a significant amount of money back into your pocket after you purchase a newly built or substantially renovated home. 

Depending on your home’s price, you could get a rebate of 100% of the GST or the federal part of the HST that you paid, with a maximum rebate amount of fifty thousand dollars. This guide will explain everything you need to know about this rebate program, including who qualifies, how much money you can get back, how to apply, and what documents you need to keep for your records.

What Is the FTHB or First Time Home Buyers GST HST Rebate

The Canada FTHB GST/HST Rebate is a federal program that helps eligible first-time home buyers recover some or all of the goods and services tax or the federal portion of the harmonized sales tax that they paid when:

• Purchasing
• Building 
• Substantially 
• Renovating

For a new home valued at or below one million dollars, the rebate eliminates the GST or federal HST completely, which means you pay no federal tax on your home purchase up to that amount. For a new home valued between one million dollars and one point five million dollars, the rebate amount is gradually reduced, and homes valued at or above one point five million dollars do not qualify for any rebate at all.

This rebate is available in addition to the existing GST/HST New Housing Rebate, and for first-time buyers, the FTHB rebate acts as a top-up or an additional amount on top of what you might already receive through the standard new housing rebate program.

Who Is Eligible for the First Time Home Buyers GST HST Rebate

To qualify for the First Time Home Buyers GST HST Rebate, you must be an individual who is buying, building, or substantially renovating their first home, and that home must be newly built or substantially renovated for use as your primary place of residence. 

• The term primary place of residence generally means the home where you live on a permanent basis, and while you may own more than one property, you can only have one primary residence at any given time. 
• The home must be located in Canada, and you cannot claim this rebate if you are a corporation or a partnership because the rebate is strictly for individual home buyers. 
• If you are buying a home together with a spouse or common-law partner, both of you must be first-time home buyers to qualify for the full rebate amount.
• Although there are partial entitlements available in some situations, where only one partner qualifies.

Understanding Substantial Renovations

The FTHB rebate also applies to homes that have been substantially renovated, but the definition of substantial renovation is very specific and requires major changes to the existing structure. For a renovation project to qualify as substantial, generally ninety percent or more of the interior of the existing housing must be removed or replaced, which essentially means the interior of the building is completely gutted and rebuilt. 

You do not need to remove or replace the foundation, the exterior walls, the interior supporting walls, the roof, the floors, or the staircases to meet the ninety percent test, as these structural elements can remain while the interior is completely redone. Only livable areas count toward the substantial renovation calculation, including finished basements and finished attics, while garages and crawl spaces do not count as livable areas. 

Work done to partially complete a basement without making it a livable finished space does not count toward the ninety percent test. If you convert a non-residential property into a house or construct a major addition onto an existing house, along with substantially renovating the existing part of the home, that property would generally meet the definition of a substantial renovation for rebate purposes.

How Much FTHB GST/HST Rebate Can You Get 

The amount of money you can recover through this rebate depends entirely on the purchase price or fair market value of your new home after construction is substantially completed. For a new home that is valued at or below one million dollars, you are eligible to recover up to 100% of the GST or the federal part of the HST that you paid, with a maximum rebate amount of $CAD 50k. For a new home valued 1M to 1.5M CAD, the maximum rebate amount is gradually reduced on a sliding scale, meaning the closer your home value gets to 1.5M dollars, the smaller your rebate becomes. 

For example, if you buy a new home valued at 1.25M CAD, that price is exactly halfway between 1 million and 1.5 million CAD. So you would be eligible for 50% of the maximum 50k CAD rebate. Which comes to 25k CAD. For any new home valued at or above 1.5 million CAD, there is no rebate available at all under this program.

The Existing GST/HST New Housing Rebate

Before the First Time Home Buyers GST HST Rebate was introduced, the existing GST/HST New Housing Rebate already allowed individuals to recover some of the GST or federal HST paid on a new or substantially renovated home for use as their primary place of residence. Under this existing  program, you can get this rebate if: 

• You purchased a new or substantially renovated home from a builder
• Purchased shares in a cooperative housing corporation
• Constructed or substantially renovated your own home as an owner-built project. 

For owner-built homes, the fair market value of the house when construction is substantially completed must be less than 405k CAD to qualify for the existing rebate. You can use our rental aid estimator tools and eligibility checker to calculate housing & rental assistance.

The new First-Time Home Buyers’ Rebate is designed to work alongside this existing program, so first-time buyers who qualify for both rebates will receive the FTHB rebate as a top-up or additional amount on top of what they already get from the standard new housing rebate. For homes located in Ontario. There is also an Ontario new housing rebate that helps recover the 8% provincial part of the HST, which is separate from both federal rebate programs.

How to Apply for the First Time Home Buyers GST HST Rebate

The FTHB GST/HST Rebate application process depends on whether you purchased your home from a builder or you built the home yourself as an owner-built project. 

Purchased a home from a builder

You will generally apply using Form GST190, which is the GST/HST New Housing Rebate Application for Houses Purchased from a Builder, and you will also need to complete the appropriate provincial rebate schedule if your home is located in a province that charges HST instead of separate GST and provincial sales tax.

Built a home or substantially renovated an existing home 

You will apply using Form GST191, the GST/HST New Housing Rebate Application for Owner-Built Houses, along with Form GST191-WS, which is the Construction Summary Worksheet that details all of your construction costs and the GST or HST you paid on materials and labor. In most cases, you do not need to send supporting documents with your initial application, but you must keep all original invoices and receipts for six years in case the CRA asks to see them later.

Documents You Must Keep for 6 Years

Keeping proper records is one of the most important parts of claiming any tax rebate, and the First Time Home Buyers GST HST Rebate is no exception because the CRA can ask you to provide supporting documents at any time during the 6-year record retention period.

• You must keep a copy of your completed rebate application forms, including any calculation worksheets that you filled out to determine your rebate amount. 
• You also need to keep all of the original documents that you used to fill out those application forms, which for a home purchased from a builder like purchase and sale agreement.
• For an owner-built home, all original invoices from contractors, suppliers, and any other vendors who charged you GST or HST on materials and labor related to the construction or renovation. 
• The CRA demands original invoices in the name of the claimant or the co-owners, and they do not accept photocopies, credit card slips, debit card receipts, bank account statements, estimates, or quotes as proof of payment.
• Keep proof of occupancy and any notice of assessment that the CRA sends you after processing your application. 
• The notice of assessment explains how your rebate was calculated and any changes that were made to your claimed amount.

Common Reasons for Processing Delays or Denied Claims

Your rebate application may be delayed or completely denied for several common reasons, so it is important to carefully review your application before submitting it to avoid these problems. 

• If your forms are not completed in full, meaning you left blank fields that should have been filled or you failed to sign where required, the CRA will not process your application until you provide the missing information. 
• If your rebate calculation is incorrect because you misunderstood the sliding scale for homes, if you miscalculated your eligible expenses, your application will be flagged for review and delayed. 
• If you fail to submit required documents with your application, such as invoices when the vendor did not charge GST or HST on the invoice, the CRA may deny your claim entirely or delay processing until you submit those documents. 
• For owner-built homes, you must send copies of invoices where the vendor did not charge GST or HST on the invoice, and these photocopies will be accepted by the CRA as part of your application package.

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