GST Rules for New Homes in BC (2026 update)

GST (Goods and Services Tax) applies at the federal 5% rate to new or substantially renovated homes in British Columbia. Resale (previously occupied) homes are generally exempt. BC does not charge provincial sales tax (PST) on the purchase of real property, so the only sales tax on new housing is the federal GST.

Buyers of new construction must budget for this cost (or qualify for rebates that reduce or eliminate it).

This guide covers the rules in detail as of 2026, based primarily on Canada Revenue Agency (CRA) guidance, the Excise Tax Act, and related federal announcements.

Rules can change; always verify with the CRA, a tax professional, or real estate lawyer for your specific situation. Thresholds, eligibility dates, and forms are critical.

When GST Applies to Homes in BC

GST is charged on the sale of new or substantially renovated residential real property. This typically includes:

• Brand-new houses, townhomes, or condo units sold by a builder/developer (including presale/pre-construction contracts where the unit has never been occupied).
• Homes that have undergone a “substantial renovation.”
• Owner-built homes (self-supply rules can apply).
• Certain conversions or additions in specific contexts.
• Assignments of new-home contracts in some cases (especially where there is profit or the original buyer is treated as a builder).

Resale homes that have been previously occupied as a residence (or long-term rental in many cases) are generally exempt from GST. The tax was typically paid when the home was first sold new. Ordinary renovations, kitchen updates, or cosmetic work do not trigger GST on a later resale.

Vacant land purchased for personal residential use is often exempt, but land bought with the intent to develop or by a registrant can be taxable.

Substantial renovation is defined in the Excise Tax Act (subsection 123(1)). It means renovations or alterations so extensive that all or substantially all of the building that existed immediately before the work began—other than the foundation, external walls, interior supporting walls, floors, roof, and staircases—has been removed or replaced, and the building is (or forms part of) a residential complex afterward.

CRA interprets “all or substantially all” as generally 90% or more. Measurement methods can include square footage of renovated floor/wall space versus total, or rooms renovated. The structural elements listed above do not need to be removed/replaced to meet the test (though if they are, they count toward the percentage). Simple additions, basement suites alone, or partial renos usually do not qualify. The test focuses on the existing building being essentially gutted and rebuilt as “new.”

If a home meets this test, the seller (often treated as a builder) must generally charge GST on the sale, and the buyer may be eligible for rebates if other conditions are met.

The GST Rate and How It Is Calculated

The federal GST rate is 5% of the purchase price (or fair market value in certain self-supply or other situations). In BC this is the only sales tax on the home purchase itself.

Example (before any rebate):

• $700,000 new home → $35,000 GST.
• $1,000,000 new home → $50,000 GST.
• $1,200,000 new home → $60,000 GST.

Purchase contracts vary: some quote prices “plus GST,” others “GST included.” Always confirm the contract wording and total payable at closing. Builders who are GST registrants collect and remit the tax.

GST/HST New Housing Rebate (the long-standing rebate)

This federal rebate is available to individuals (not corporations or most partnerships/trusts) who buy or build a new or substantially renovated home for use as their (or a qualifying relation’s) primary place of residence.

Key features for BC (5% GST):

• Rebate of 36% of the GST paid, to a maximum of $6,300.
• Full rebate available when the purchase price/fair market value is $350,000 or less.
• Phases out linearly between $350,000 and $450,000.
• No rebate at or above $450,000.

Formula for the phase-out range (approximate): Rebate = $6,300 × ($450,000 − price) / $100,000.

Examples:

• $350,000 home: GST $17,500 → full rebate $6,300 → net GST $11,200.
• $400,000 home: GST $20,000 → rebate ~$3,150 → net ~$16,850.
• $450,000+ : rebate $0 → full 5% GST payable.

The buyer (or qualifying relation such as spouse, common-law partner, parent, child, or sibling in many cases) must intend to occupy it as a primary place of residence and generally be the first to occupy it after substantial completion. The rebate is claimed via Form GST190 (for purchases from a builder) or GST191 (owner-built). Builders often credit the rebate at closing if eligibility is clear.

Because typical new-home prices in much of BC (especially Metro Vancouver and surrounding areas) exceed $450,000, this rebate frequently provides little or no relief for many buyers.

First-Time Home Buyers’ (FTHB) GST/HST Rebate (major 2025/2026 change)

This is the more significant relief for eligible buyers. Introduced via legislative amendments (Bill C-4 received Royal Assent in March 2026), it provides a rebate of up to $50,000 of the GST (or federal portion of HST) on qualifying new or substantially renovated homes.

Key amounts (BC / 5% GST):

• Homes valued at $1,000,000 or less: up to 100% of the GST rebated (maximum $50,000). Net GST can be $0.
• Homes between $1,000,000 and $1,500,000: linear phase-out. Example at the midpoint ($1.25 million): roughly 50% of the maximum, or up to $25,000.
• $1,500,000 or more: no FTHB rebate.

It works together with (or as a top-up to the eligibility of) the existing New Housing Rebate rules, effectively allowing full recovery of GST up to the higher thresholds for first-time buyers.

Eligibility as a first-time home buyer (all generally required):

• At least 18 years of age.
• Canadian citizen or permanent resident.
• Have not lived in a home that you or your spouse/common-law partner owned (or jointly owned), anywhere in the world, as a primary place of residence in the calendar year of the relevant date or the four preceding calendar years.
• Neither you nor your spouse/common-law partner has previously received an FTHB GST/HST rebate (once-in-a-lifetime, with spousal linkage).
• The home is new or substantially renovated and will be used as your primary place of residence; you are generally the first individual to occupy it after substantial completion.

The relevant “test date” depends on the situation (ownership transfer for purchases from a builder; possession in some lease cases; earlier of first occupancy or substantial completion for owner-built).

Timing / window requirements (critical):

• Agreement of purchase and sale with the builder generally entered into on or after March 20, 2025, and before 2031.
• Construction or substantial renovation begins before 2031 and is substantially completed before 2036.
• Ownership/possession transfer (as applicable) before 2036.
• Similar windows apply to owner-built homes and co-op shares.

Assignments of contracts originally signed before the start date generally do not qualify the assignee for the FTHB rebate. Special anti-avoidance rules exist for cancelled/varied agreements intended to access the rebate improperly.

Builders can often credit the rebate at closing in the same manner as the traditional New Housing Rebate. Otherwise, claim directly with the CRA (usually within two years of taking ownership or finishing construction). Use the applicable forms and worksheets (e.g., GST190 and related calculation worksheets that now accommodate the FTHB rebate).

Investors, Rentals, and the New Residential Rental Property Rebate

Neither the traditional New Housing Rebate nor the FTHB rebate is available if the home is purchased as an investment, rental, vacation property, or flip (no primary residence intent). Full 5% GST is generally payable at closing.

A separate GST/HST New Residential Rental Property Rebate (Form GST524) may be available later for landlords who acquire or construct new residential rental property intended for long-term residential use. It generally provides 36% of GST (capped at $6,300 per qualifying unit in the standard rules), with no (or different) price phase-out in some cases. There is also enhanced relief (up to 100% of federal GST in certain circumstances) for qualifying purpose-built rental housing. Claim after the fact from the CRA; conditions include holding periods and proper documentation (e.g., leases).

Self-supply rules can apply when a builder or developer constructs rental housing for their own use as a landlord.

Assignments, Presales, and Other Edge Cases

Presale contracts for never-occupied units are treated as new-home sales and attract GST. Assignments before first occupancy can also trigger GST considerations (the assignor may be seen as making a taxable supply of the interest, or the original contract terms matter). Profit on assignment may have GST implications. Due diligence on the original agreement date is essential for FTHB eligibility.

Owner-built homes have parallel but distinct rebate pathways (Forms GST191 etc.) and self-supply valuation rules.

Mobile homes, floating homes, and co-op shares have specific rules and adjusted thresholds in some cases.

Interaction with BC Property Transfer Tax (PTT)

GST is federal and separate from BC’s Property Transfer Tax. BC offers a newly built home exemption from PTT for qualifying principal residences. As of recent updates, a full exemption is available for newly built homes with fair market value up to $1,100,000 (with a partial phase-out above that, ending around $1,150,000), subject to Canadian citizenship/permanent residency, principal residence use, size limits (generally ≤ 0.5 hectares), and first registration of the completed improvement conditions. This can stack with GST relief for eligible buyers.

Confirm current PTT thresholds and forms with the BC government, as they are provincial and independent of GST.

Practical Claiming and Closing Notes

• Confirm whether the listed price includes or excludes GST.
• Provide the builder/lawyer with eligibility documentation early so any available rebate can be credited at closing (reducing cash required).
• Keep records of occupancy intent, construction timelines, citizenship/status, prior ownership history, and forms.
• Time limits exist (often two years from ownership transfer or substantial completion).
• Corporations, partnerships, and pure investors generally cannot access the owner-occupier rebates at closing.
• Spousal/common-law status affects the first-time buyer look-back and prior-claim rules—structure title carefully.
• CRA may review claims; genuine primary residence intent is required.

Example Net GST Scenarios (Illustrative, BC 5% GST)

(Traditional rebate only helps meaningfully below ~$450,000. Exact phase-out math and eligibility must be calculated case-by-case.)

Key Takeaways

• New or substantially renovated homes → 5% GST in BC.
• Resale previously occupied homes → generally no GST.
• Traditional New Housing Rebate → limited value above $350k–$450k (max $6,300).
• First-Time Home Buyers’ Rebate → potentially eliminates GST up to $1M (max $50,000 savings) for qualifying buyers on agreements in the eligibility window, with phase-out to $1.5M.
• Investors pay full GST at closing (possible later rental rebate).
• Always cross-check contract dates, construction timelines, occupancy intent, prior ownership (including spouse), and citizenship/status.
• Separate BC PTT newly built home exemption may also apply.

For the most authoritative and current details, consult:

• CRA pages on GST/HST New Housing Rebate and First-time Home Buyers’ GST/HST Rebate.
• Guide RC4028 and related forms/worksheets.
• Department of Finance announcements on the FTHB measure.
• A qualified real estate lawyer or tax advisor familiar with BC transactions.

This overview is for informational purposes and does not constitute tax, legal, or financial advice. Individual circumstances vary, and CRA interpretations or legislative updates can affect outcomes. Verify all details directly with official sources before relying on them for a purchase decision.