GST/HST When Building a House
The three ways to build and their rebate routes, what the rebates are worth, building to rent or sell, and invoices.
The short version
- When you build a house, GST/HST applies to almost everything: materials, trades, the general contractor, engineering, often the land if bought from a business. On a $700,000 build in Ontario, the HST is in the order of $80,000.
- How you get rebates depends on how you build: buying a finished house and land from a builder (form GST190), or building or having a house built on land you own (owner-built, form GST191).
- First-time buyers can get up to $50,000 of the GST back on new homes up to $1 million; everyone else gets the older federal rebate, which disappears above $450,000. Provincial rebates in HST provinces are separate.
- Build to rent and you'll usually self-assess GST/HST on the home's value when the first tenant moves in. Build to sell and you're a builder: the sale is taxable.
- Rebates depend on invoices that show GST/HST paid, and on deadlines measured from when you move in or finish.
GST/HST When Building a House
A custom home is a few hundred decisions and a few thousand invoices. Most of those invoices carry GST or HST, and on a new house it adds up to the price of a decent truck. Whether you get a meaningful part of it back depends on three things settled long before the roof goes on: how the land and the construction contract are set up, who will live in the house, and whether you keep the paper. Here's the map.
Three Ways to Build, Three Rebate Routes
| How you build | Who pays the GST/HST | Rebate route |
|---|---|---|
| Buy a lot and house together from a builder (one agreement) | Included in the builder's price | New housing rebates, usually assigned to the builder; form GST190 if you claim; see new housing rebate |
| Own the land; hire a builder under a construction contract | You pay GST/HST on the contract price | Owner-built rebates, form GST191; see owner-built home rebate |
| Own the land; act as your own general contractor | You pay GST/HST on every material and trade invoice | Owner-built rebates, form GST191 with worksheet |
A builder who sells you the land and builds on it under two separate agreements can change which route applies. Read the agreements together, and ask the builder in writing which rebate application they expect you to file.
Building a house? Check the HST before you sign
Describe the land, the contract structure, the price and whether you're a first-time buyer. The assistant tells you which rebate route applies, what it's worth, and what to put in the contract.
What the Rebates Are Worth
| Rebate | Maximum | Value limit |
|---|---|---|
| Federal new housing or owner-built rebate | 36% of the GST (or federal part of HST), up to $6,300 | Full under $350,000; nothing at $450,000 or more (house and land) |
| First-time home buyers' GST rebate | Up to 100% of the GST, maximum $50,000 | Full up to $1 million; nothing at $1.5 million. Builder agreements from May 27, 2025, or owner-built construction starting on or after that date, and before 2031 |
| Provincial rebates (HST provinces) | Varies by province | Varies |
For most custom homes in today's market, the old federal rebate is gone (the value is over $450,000), so the first-time buyers' rebate and the provincial rebate are where the money is. In Ontario, the provincial owner-built rebate can be worth up to $24,000; OntarioHSTRebates.ca covers it in detail.
Building to Rent or to Sell
- To rent long-term: when the first tenant moves in, you're generally deemed to have sold the house to yourself at fair market value and must self-assess GST/HST on that value. Then claim the new residential rental property rebate. Garden suites and laneway houses are included.
- To sell: you're a builder; GST/HST applies to the sale price and you claim input tax credits if registered. See house flipping tax.
- To live in, then sell years later: generally no GST/HST on the later sale if you built it for yourself and lived in it.
Get your GST/HST set up right the first time
The GST/HST SmartFile runs both $30,000 tests on your sales, compares the quick method with the regular method, and fills in form GST74 if the quick method wins.
Invoices: The Whole Game
- Every invoice should show the supplier's name, GST/HST number, the tax charged and, ideally, the property address.
- Trades who don't charge GST/HST (small suppliers, or cash) add nothing to your rebate.
- Your own labour earns nothing.
- Keep the building permit, occupancy permit and the date you moved in; rebate deadlines run from occupancy or substantial completion.
Owner-builders generally have two years from the earlier of moving in or substantial completion to file. The records rules are on recordkeeping requirements.
The Income Tax Side
Building on a vacant lot has income tax effects too: the years before the house is lived in generally can't be designated as your principal residence, and land carrying costs aren't deductible. See vacant land tax issues.
The national overview is on GST/HST on new homes; for a renovation rather than a new build, see GST/HST on home renovations.
Building a House GST/HST Questions
Do I pay GST/HST when I build a house?
Yes, on taxable materials, contractors and services used in the build, and on the land if you buy it from a business or a registrant. Rebates may return part of the tax if you or a relation will live in the home.
What rebate do I claim if I build on my own land?
The owner-built new housing rebate, on form GST191, plus the first-time home buyers’ GST rebate if you qualify, and any provincial rebate in an HST province.
What if I buy the land and the house from the same builder?
Usually you buy a finished home, and the new housing rebates are claimed through the builder or on form GST190.
Do I owe GST/HST if I build a house to rent out?
Generally yes. When the first tenant moves in you self-assess GST/HST on the fair market value, and you may then claim the new residential rental property rebate.
What is the deadline for an owner-built rebate?
Generally two years after the earlier of first occupancy or substantial completion of the house.
Sources: CRA, GST/HST and home construction; Guide RC4028; Finance Canada, GST relief for first-time home buyers. Checked October 2026. The HST estimate is illustrative. Which rebate route applies with separate land and construction agreements depends on the facts; we can't confirm it for a particular contract.
Last reviewed October 4, 2026 against CRA and Government of Canada sources. How we check our facts.