Claiming GST/HST Rebates (New Housing, Rental, etc.)

Introduction
Understanding claiming GST/HST rebates is essential for homebuyers, investors, landlords, builders, developers and assignment sellers across Canada. Rebates exist to reduce the tax burden on new housing purchases, substantial renovations, and new residential rental properties. However, the rules are complex, and misunderstandings frequently lead to denied applications, CRA reassessments or repayment demands. Québec has its own provincial equivalent under QST, adding a second layer of rules. This guide explains everything Canadians need to know about claiming GST/HST rebates, who qualifies, which forms are required, and how to avoid mistakes that lead to penalties or lost refunds.

Legal and Regulatory Framework
Claiming GST/HST rebates is governed by the Excise Tax Act and Québec’s Taxation Act. The three primary rebate categories are:

1. GST/HST New Housing Rebate (Principal Residence)

Available when purchasing a newly built home, condo or substantially renovated residence intended as a primary place of residence.
Key requirements:

• buyer (or a related individual) must live in the home
• purchase must be from a builder or via self-build
• purchase price and family income may affect rebate amounts
• must file Form GST190 (or provincial equivalents)

2. GST/HST New Residential Rental Property Rebate (NRRPR)

Available to landlords purchasing new residential rental units to rent to long-term tenants.
Key requirements:

• purchaser must intend to rent to long-term tenants
• cannot live in the unit themselves
• must file Form GST524
• landlords may qualify even if the tenant is a family member under specific rules

3. Provincial Rebates (HST Provinces and Québec)

HST provinces have their own rebate formulas:
• Ontario New Housing Rebate
• Nova Scotia HST Rebate
• Prince Edward Island
• Newfoundland and Labrador

Québec has the QST New Housing Rebate with its own forms and eligibility thresholds.

Eligibility Changes Based on Use

GST/HST rebates can be denied if the CRA believes the property was purchased:

• to flip
• for airbnb/short-term rental
• for investment speculation
• for assignment profit

Understanding the rules is essential for claiming GST/HST rebates accurately.

Key Court Decisions
Courts have addressed hundreds of cases involving claiming GST/HST rebates. Key principles include:

• principal residence requirement must be proven—courts denied rebates when owners failed to occupy the property
• assignment sales often lose rebate eligibility unless specific criteria are met
• short-term rentals may disqualify buyers from housing rebates
• substantial renovation definition must be met—minor renovations do not qualify
• landlords must prove intent to rent long-term for NRRPR eligibility
• GST must actually have been paid to receive a rebate
• false occupancy claims result in penalties and fraud investigations

Québec courts have similarly strict rulings for QST rebates, especially for investors misusing residential units for Airbnb.

These rulings highlight why claiming GST/HST rebates requires careful documentation and compliance.

Why CRA and Revenu Québec Target This Issue
Rebate applications are heavily audited because:

• many buyers falsely claim that they intended to occupy the property
• investors apply for rebates intended for homeowners
• assignment sales often misapply GST/HST rules
• landlords misclassify rental units
• flipping activity is widespread
• new housing purchases involve large sums of money
• renovation claims may not meet the “substantial renovation” threshold
• Airbnb operators misuse rebate programs

Audit triggers include:

• not updating address with CRA
• flipping or selling the property quickly
• claiming a rebate on multiple homes
• no proof of occupancy (utility bills, driver’s licence, lease termination)
• buying under a corporation
• renting out immediately after purchase
• assignment purchase agreements

Understanding claiming GST/HST rebates avoids reassessments and major penalties.

Mackisen Strategy
Mackisen CPA provides a complete and defensible method for claiming GST/HST rebates:

• determining whether you qualify for the New Housing Rebate or NRRPR
• calculating eligible amounts under federal and provincial formulas
• reviewing purchase agreements and builder statements
• confirming occupancy or rental intent requirements
• preparing GST190, GST524, or QST rebate forms correctly
• documenting evidence of occupancy or rental use
• handling rebate applications for assignment sales
• representing clients during CRA or Revenu Québec rebate audits
• refiling rejected rebate applications
• advising investors on proper structuring to avoid rebate loss

Our structured approach ensures that you maximize your rebate while remaining fully compliant.

Real Client Experience
Many individuals and investors approach Mackisen after CRA challenges their rebate applications:

• A couple claimed the New Housing Rebate but lived with family for months. CRA denied the rebate. Mackisen appealed with proof of delayed move-in and won.
• A Québec buyer rented the unit for Airbnb, losing eligibility. We corrected the application and filed for the NRRPR instead.
• An investor purchased a condo to flip but attempted to claim a homeowner rebate. CRA reassessed and charged penalties. Mackisen negotiated a reduced liability.
• A landlord failed to file GST524. We filed late applications with full documentation and recovered thousands in rebates.
• An assignment seller misapplied GST rules on assignment profits. Mackisen corrected filings and preserved the buyer’s rebate rights.

These cases show how complex claiming GST/HST rebates can be without proper guidance.

Common Questions
Clients frequently ask:

• Do I qualify for the New Housing Rebate?
Only if you or a close relative intend to live in the home.

• Can I get a rebate as a landlord?
Yes—under the New Residential Rental Property Rebate.

• Do I qualify if I flip the home?
No—flippers generally do not qualify.

• Is Airbnb considered long-term rent?
No—short-term rentals are considered commercial, not residential.

• Does Québec have its own rebate?
Yes—QST has an independent rebate program.

• Can I claim rebates for a newly renovated home?
Only if the renovation is “substantial” according to CRA’s strict definition.

These answers clarify the rules for claiming GST/HST rebates.

Why Mackisen
With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses and individuals stay compliant while recovering the taxes they’re entitled to. Whether you're filing your first GST/QST return, claiming a housing rebate, or navigating complex real estate tax rules, our expert team ensures precision, transparency and protection from audit risk. When claiming GST/HST rebates, Mackisen provides full rebate preparation, documentation support, appeal representation and strategic planning for buyers, landlords and investors.