New Housing Rebates: How Builders Can Help Clients Claim GST/HST Rebates on Homes — CPA Firm Near You, Montreal

New housing rebates are one of the most powerful financial incentives available to homebuyers in Quebec and across Canada — but they are also among the most misunderstood. Builders who understand these programs not only help their clients save thousands of dollars, but also reduce the risk of CRA or Revenu Québec disputes that could delay closings or trigger reassessments. Many homeowners lose the rebate entirely simply because paperwork, invoices, or eligibility conditions are not prepared correctly.

This expanded guide explains how GST/HST/QST rebates work, which buyers are eligible, how builders should document rebate-related transactions, the most common audit issues, and how a CPA firm near you in Montreal can help both builders and homebuyers navigate these rules safely.

Legal and Regulatory Framework

The federal GST/HST New Housing Rebate and the Quebec New Housing Rebate allow homeowners to recover a portion of the GST or HST/QST paid on:

• The purchase of a newly built home
• Substantially renovated homes
• Owner-built residences
• Additions or major expansions
• Conversions of non-residential buildings to residential
• Certain mobile homes and floating homes
• Modular and prefabricated homes

These rebates apply only to new construction or qualifying major renovations — not to typical resale homes.

To qualify, the property must generally be:

• Purchased as a primary place of residence
• Occupied by the buyer or an immediate family member
• Below required price thresholds
• Purchased from a builder who charged GST/QST
• Properly documented with agreements and invoices

In Quebec, the GST rebate is administered federally by CRA, while the QST rebate is administered separately by Revenu Québec.

Homeowners may apply for:

• Federal GST New Housing Rebate
• Quebec QST New Housing Rebate (if applicable)
• Federal/Ontario HST credit (for out-of-province buyers)

Builders must ensure their agreements of purchase and sale clearly show:

• GST and QST amounts
• Whether the rebate has been assigned to the builder
• Who will file the rebate application
• Adjustments made at closing

Builders often credit the rebate upfront on the purchase price and submit the rebate on behalf of the buyer, making accuracy critical.

Key Court Decisions and Legal Precedents

Courts have consistently enforced strict compliance for housing rebate eligibility. In multiple cases, rebates were denied because:

• The buyer did not occupy the property as a primary residence
• The property was rented out before the buyer moved in
• The buyer assigned the agreement prior to closing
• The builder failed to provide a proper breakdown of GST/QST
• Invoices lacked builder information or RBQ registration
• Incorrect rebate calculations were used at closing
• Occupancy requirements were misunderstood

In one landmark case, a homebuyer lived in the property only intermittently while maintaining another primary residence. The court denied the rebate because residency was not fully established.

In another case, the rebate was denied because the purchase contract incorrectly described tax treatment. Even though the buyer was eligible, CRA ruled that the builder’s miscalculation invalidated the initial rebate credit and required repayment.

In Quebec-specific rulings, incomplete invoices or missing RBQ license numbers caused entire QST rebates to be rejected. Courts reinforced that builders must issue invoices that comply with provincial contracting regulations.

These cases highlight that both builders and buyers must carefully document eligibility to avoid costly reversals.

Why CRA and Revenu Québec Closely Scrutinize New Housing Rebates

Housing rebates are high-dollar tax expenditures — often involving thousands of dollars per property — making them a priority for review. Auditors commonly target rebates because:

• Builders sometimes misapply rebate formulas
• Buyers do not meet residency requirements
• Agreements inaccurately show whether tax is included
• Assignment sales complicate eligibility
• Multiple family members contribute to confusion
• Properties are used for Airbnb or investment instead of residency
• Renovations do not meet “substantial renovation” thresholds
• Invoices for materials and labour are incomplete

CRA and RQ frequently check:

• Land registry data
• Utility usage patterns
• Occupancy timelines
• Mortgage documents
• Insurance files showing primary residence
• Short-term rental listings
• Builder invoices and schedules
• Sales tax remittance records

If inconsistencies appear, rebates are often clawed back.

Builder Responsibilities and Best Practices

Builders play a major role in ensuring that clients can successfully claim their GST/HST/QST rebates. When builders issue incomplete documentation, fail to explain rebate assignment, or miscalculate tax, the homeowner may face a denied claim years later.

To protect clients and themselves, builders should implement:

1. Accurate Purchase Agreements
Contracts must clearly identify:

• Whether GST/QST is included or added
• Whether the buyer has assigned the rebate to the builder
• The exact rebate amount credited at closing
• The selling price before tax and after tax
• The closing adjustments

Ambiguity is one of the leading causes of denied rebates.

2. Clear Invoicing Procedures
Invoices must include:

• Builder name and address
• GST/QST registration numbers
• Detailed materials and labour
• Breakdown of taxable and non-taxable items
• RBQ license (for Quebec builders)
• Exact amounts paid and dates

Builders who provide vague invoices risk CRA or RQ denying rebate claims.

3. Occupancy Verification
If buyers must apply for a rebate directly, builders should advise them to keep proof of occupancy, such as:

• Utility bills
• Driver’s license update
• Lease termination for previous residence
• Delivery or moving invoices
• Insurance showing owner occupancy

4. Assignment Sales Policies
Builders must be clear about how rebate eligibility changes when:

• The original purchaser assigns the agreement
• The assignee’s residency differs from the assignor
• Rebate rights are transferred

Assignment sales are the most frequently denied rebate category.

5. Renovation Documentation
For substantial renovation claims, builders must maintain proper evidence, including:

• Before and after photos
• Material lists
• Demolition records
• Invoices showing >90% of interior replaced
• Contracts and work descriptions

This documentation is often requested years after inspection.

The Mackisen Strategy: Helping Builders Protect Clients and Themselves

At Mackisen CPA Montreal, we help builders establish a fully compliant rebate support system, including:

• Reviewing purchase agreements to ensure correct tax wording
• Advising builders whether to include or exclude GST/QST in advertised pricing
• Drafting compliant invoice templates
• Setting up tax documentation protocols
• Training sales teams on rebate requirements
• Verifying occupancy and eligibility before final crediting
• Preparing GST/QST rebate calculations
• Filing rebate applications on behalf of builders or buyers
• Resolving disputes with CRA and Revenu Québec

We eliminate the guesswork and protect builders from errors that can lead to costly rebates being reversed.

Real Client Experience

A Montreal condominium developer miscalculated rebates in multiple agreements, crediting buyers with amounts they were not entitled to. CRA reassessed the builder for under-remitted sales tax. We corrected all contracts, recalculated GST/QST, and negotiated a structured payment arrangement that prevented financial strain on the builder.

Another builder issued invoices without RBQ numbers or GST/QST registration details. Dozens of buyer rebates were denied. We reconstructed compliant invoices, resubmitted documentation, and secured successful rebate claims after appeal.

A first-time homeowner hired a renovation contractor for a substantial remodel but lacked before-and-after documentation. Revenu Québec denied the QST rebate initially. We rebuilt the file using purchase records, demolition receipts, and supplier invoices, ultimately recovering the refund.

These cases show how easy it is for rebate claims to go wrong — and how detailed documentation saves thousands of dollars.

Common Questions

Who is eligible for the GST/QST new housing rebate?

Homebuyers purchasing a newly built or substantially renovated primary residence, provided price thresholds and occupancy rules are respected.

Can builders claim the rebate on behalf of the buyer?

Yes. Many purchase agreements assign the rebate to the builder, who credits it in the final sale price.

Are rentals or Airbnbs eligible?

Generally no. Primary occupancy is required; investment properties often fail eligibility tests.

Do substantial renovations qualify?

Only if more than 90% of internal structure and finishing materials are replaced, excluding foundation, roof, exterior walls, and similar structural components.

What if the buyer assigns the purchase agreement?

Eligibility may change. Many assignments require the assignee to apply directly for the rebate.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps builders, developers, and homebuyers prepare accurate, compliant GST/QST housing rebate claims. Whether you sell new homes, build custom residences, or perform major renovations, our expert team ensures precision, transparency, and full audit protection.