GST on a New Build in Edmonton, and the Rebate You Might Get Back

Key takeaways

• New construction attracts GST. Resale generally does not.
• The rebate is federal and based on the purchase price.
• Above the phase-out threshold there is no rebate at all — which catches a lot of Edmonton new builds.
• Builders usually quote GST-included prices with the rebate assigned to them. Confirm it in writing.
• A substantially renovated home can be treated as new for GST purposes.

Who this guide is for

Anyone looking at new construction in Edmonton or the surrounding communities — the south and southwest, the far northeast, Spruce Grove, Beaumont, Leduc — where a great deal of what is for sale has never been lived in.

Why new and resale are treated differently

GST applies to new goods and services. A newly built home is, for tax purposes, a new good being sold for the first time. A resale home has already been through that once, so it is generally exempt.

This is the single biggest tax difference between buying new and buying resale in Alberta, and it is invisible on a listing. Two homes at the same advertised price are not necessarily the same amount of money.

How the rebate works

The GST New Housing Rebate returns part of the tax on qualifying homes. It is tied to the purchase price: the full rebate is available up to $350,000, then it reduces on a sliding scale, reaching zero at $450,000.

Those thresholds have not moved with Edmonton prices, which is the practical problem. A great many new homes in this market sit above the upper figure, and for those there is no federal rebate at all. It is not a small consideration on a new build.

Who actually claims it

In most Edmonton new-build purchases the builder credits the rebate against the price and claims it themselves. That is why the sign says one number and the contract does not add tax on top.

It is not automatic. Whether the price includes GST and who is claiming the rebate are terms of your contract, and they should be stated in it. If you are assigning the rebate to the builder, you are signing something that says so.

• Is the quoted price GST-included or GST-extra?
• Has the rebate been factored into that price?
• Am I assigning the rebate to the builder, and where does the contract say so?
• If I do not qualify, what happens to the price?

Where buyers get caught

The rebate has eligibility rules, and the common trip-ups are about how the home will be used rather than about the price.

• The home generally has to be a primary place of residence for you or a close relation.
• Buying a new home as a rental is treated differently, with a different rebate stream and different paperwork.
• If your circumstances do not match what the contract assumed, the amount credited at the front end can come back as a problem.

None of this is exotic, and none of it is a reason to avoid new construction. It is a reason to have your lawyer read the GST clauses rather than skimming them.

Substantially renovated homes

A home that has been substantially renovated can be treated as new for GST purposes, which surprises people looking at a gutted-and-rebuilt older house in a mature Edmonton neighbourhood.

Whether a particular renovation meets that bar is a tax question with a specific test, not a matter of how new it looks. If you are buying something that has been taken back to the studs and rebuilt, ask before you assume it is exempt.

How this fits the rest of your closing costs

GST on a new build, where it applies, dwarfs the other closing costs in Alberta. Land Titles registration here is modest and there is no provincial land transfer tax, which is a genuine advantage of buying in this province — but it does not offset tax on a new home.

Build the GST question into your comparison at the shortlist stage, not at the contract stage. It can change which of two homes is actually cheaper.

New build versus resale, on the same money

The comparison buyers make is usually the wrong one. Two homes advertised at the same price are not the same purchase if one is new, because the tax treatment differs and the extras differ too.

• A resale home generally has no GST, and usually comes with window coverings, appliances, a fence, a deck and grass.
• A new home may have GST inside or outside the quoted price, and often needs landscaping, fencing, window coverings and sometimes appliances afterwards.
• New construction carries mandatory warranty coverage in Alberta. Resale does not.

None of that makes one better than the other. It makes them different products, and the honest comparison is total cost to be living there comfortably, not the number on the sign.

Deposits and progress payments on a new build

Buying from a builder often does not work like buying a resale home. Rather than a single deposit held in trust until closing, a builder contract may call for staged payments as construction progresses.

Those are terms of the builder’s own contract, which is not the standard residential purchase contract most Edmonton resale deals use. It is longer, it is written by the builder, and it is worth having your lawyer read it before you sign rather than after.

Ask specifically what is payable when, what happens if completion is delayed, and what protection exists for money paid before the home is finished.

Possession dates move on new construction

A resale possession date is a date. A new-build completion date is an estimate that the contract will usually allow to move, sometimes substantially.

That has knock-on effects a first-time buyer rarely anticipates: a rate hold that expires, a lease that ends before the house is ready, a moving company booked for a week that slips. None of it is a reason not to buy new, but all of it is a reason to read the completion clauses and to keep your rate hold and your lease end date in view.

Questions to ask a builder or their sales representative

• Is the advertised price GST-included?
• Is the New Housing Rebate assigned to you, and is that in the contract?
• What is the total amount payable, all in, on possession day?
• If I do not qualify for the rebate, what changes?
• Are there other charges — lot levies, upgrades, landscaping holdbacks — not in the headline price?

Sources

• Canada Revenue Agency — GST/HST new housing rebate
• Government of Alberta — buying a home
• Alberta New Home Warranty — new home buyer protection

Frequently asked questions