Is GST/HST charged on the sale of a house, or only on new homes?
In 2026, GST/HST is not charged on the sale of a used house: Schedule V, Part I of the Excise Tax Act exempts it. A new or substantially renovated home sold by a builder is taxable at 5% GST or 13% to 15% HST, and a builder who rents a new home instead owes tax on its fair market value.
Which house sales are taxable, and which are exempt?
The CRA's rule of thumb: sales of newly constructed or substantially renovated residential property are taxable, and most sales of previously occupied housing are exempt canada.ca. The detail sits in Schedule V, Part I of the Excise Tax Act, and the seller's status decides more cases than the house does.
| Sale | GST/HST | Where the rule sits |
|---|---|---|
| Used house sold by an owner who is not its builder | Exempt, unless the seller claimed an ITC on buying or improving it | Schedule V, Part I, s.2 |
| New house sold by a builder | Taxable on the full price | Taxable by default; no exemption applies |
| House sold after a substantial renovation by the renovator | Taxable | The renovator is a builder (ETA 123(1)) |
| House an individual built, lived in as a home, then sold | Exempt if no ITC was claimed | Schedule V, Part I, s.3 |
| New house a builder rents out instead of selling | Tax on fair market value when the first tenant moves in | ETA s.191 (self supply) |
| Later sale of that rented house | Usually exempt | Guide RC4052 |
| Assignment of a purchase agreement for a new home | Taxable, for assignments since May 7, 2022 | Guide RC4052 |
| Vacant land sold by an individual who used it personally | Usually exempt, unless used in a business or carved out of a subdivided parcel (a single split into two parts can still qualify) | Schedule V, Part I, s.9(2) |
Section 2 of Schedule V, Part I exempts a sale of a residential complex by a person who is not a builder of it, unless that person claimed an input tax credit on the last acquisition or on an improvement laws-lois.justice.gc.ca. Where the tax does apply, the rate is 5% GST in the GST provinces and territories, 13% HST in Ontario, 14% in Nova Scotia since April 1, 2025, and 15% in New Brunswick, Newfoundland and Labrador and Prince Edward Island
canada.ca.
Worked example: one $800,000 Ontario house owes $0 or $104,000, depending on who sells it
Take one detached house in Ontario worth $800,000, land included, at 13% HST. What your client owes depends on who sells it and what happened to it first.
| Who and what | HST charged or self assessed |
|---|---|
| A family sells the house they have lived in for ten years | $0 (exempt) |
| A builder sells it new to a buyer: 13% × $800,000 | $104,000, collected from the buyer |
| The builder can't sell, so it leases the house to a tenant: 13% × $800,000 fair market value | $104,000, self assessed by the builder |
| Two years later the builder sells it, having only rented it out | $0 (usually exempt) |
| An individual built it to live in, claimed no ITCs, and sells it three years later | $0 (exempt) |
The builder who leases is the one that gets caught. The self supply makes it account for HST on the fair market value at the time possession is given, and it isn't entitled to claim an ITC for the tax it is considered to have paid on the self supply when the house is only rented canada.ca. At an $800,000 value the federal rental rebate doesn't help either: no rebate of the GST or federal part of the HST is available when a unit's fair market value is $450,000 or more
canada.ca.
The good news comes at the end. Once the builder has paid tax on the self supply and used the house only for exempt long term rentals, its later sale is usually exempt canada.ca. For the buyer of the new house, the rebates that can claw back some of the $104,000 are on the GST/HST new housing rebate page and, for qualifying buyers, the first time home buyers' GST rebate.
Who counts as a builder, and why one flip is enough
Under ETA 123(1), a builder includes a person who, while holding an interest in the land, has the house built or substantially renovated, whether they do the work or hire someone, and a person who acquires an interest in a house before anyone has lived in it for the primary purpose of selling it laws-lois.justice.gc.ca. An individual is carved out when they do this otherwise than in the course of a business or an adventure or concern in the nature of trade, which is why a client building their own home is generally not a builder
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Repetition isn't required. The CRA says someone who buys a house intending to substantially renovate it and resell it is a builder, even if they never do it again canada.ca. That client owes GST/HST on the sale, and the income tax side may land under the residential property flipping rule if they held the house less than 365 days.
The renovation has to be substantial to change the answer. The CRA test is that 90% or more of the interior of the existing housing has been removed or replaced, counting livable areas only, such as a finished basement or attic but not a garage or crawl space canada.ca. The foundation, external walls, interior supporting walls, floors, roof and staircases don't have to go
laws-lois.justice.gc.ca. New kitchens, bathrooms and flooring on a resale home fall well short, so a client who does a cosmetic renovation and resells generally isn't a builder and the sale stays exempt under section 2, provided no ITC was claimed.
When does the self supply rule tax a builder that never sold?
Subsection 191(1) deems the builder of a single unit house or condo unit to have sold and bought back the home when construction or substantial renovation is substantially complete and the builder gives possession to a tenant, or moves in itself if it's an individual, with the first occupant tied to that arrangement laws-lois.justice.gc.ca. The tax is calculated on fair market value, building and land, at the later of substantial completion and the day possession is given. For a multiple unit building, 191(3) deems a sale of the whole complex once the first unit is leased
laws-lois.justice.gc.ca.
A registered builder reports the tax on line 103 of the return for the period in which the self supply happens. An unregistered builder still owes it: it reports on line 103 of Form GST62 and remits by the end of the month after the month of the self supply canada.ca. The rules apply whether or not the builder is registered
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Subsection 191(5) switches the rule off for an individual builder whose home, after completion, is used primarily as a place of residence of the individual, a related individual or a former spouse or common law partner, and who claimed no ITC on acquiring or improving it laws-lois.justice.gc.ca. A model home isn't a self supply until someone occupies it or it's leased long term
canada.ca.
Two rebates soften the self supply on rentals. A builder can claim the new residential rental property rebate on a self supply, with the fair market value set when the self supply occurs and a deadline of two years after the end of the month it occurred canada.ca. A purpose built rental building with at least four private apartment units (or ten units in total), construction started after September 13, 2023 and before 2031, and at least 90% of units held for long term rental gets 100% of the GST or federal part of the HST back
canada.ca. Condo units, single houses, duplexes and triplexes don't qualify for that one.
Which edge cases catch accountants?
Assignments. Every assignment sale of newly constructed or substantially renovated housing is taxable since May 7, 2022, and the tax applies to the total consideration, less any part the assignment agreement identifies as repaying the assignor's deposit to the builder canada.ca. For agreements before that date, the answer turned on whether the assignor's primary purpose was to resell or to live in the home.
ITCs claimed in the past. A seller who claimed an input tax credit on buying or improving the house loses the section 2 exemption laws-lois.justice.gc.ca. Ask before closing, not after, because a registrant who used the house in a business may be selling taxable property.
Vacant land. A sale of real property by an individual or personal trust is generally exempt under section 9(2), but not when the land was used in a business with a reasonable expectation of profit, sold in the course of a business, or is part of a parcel the individual subdivided laws-lois.justice.gc.ca. The CRA's guide allows a split into only two parts if the original parcel wasn't previously severed from another parcel
canada.ca.
Timing. On a taxable sale of real property, the tax becomes payable on the earlier of the day ownership transfers and the day possession transfers under the agreement canada.ca.
Sources
Does my client charge GST/HST when selling a rental property they bought used?
No, as a rule. A residential complex sold by someone who isn't its builder is exempt under Schedule V, Part I, section 2, as long as the seller claimed no input tax credit on buying it or on improvements laws-lois.justice.gc.ca. The answer changes only if your client substantially renovated it first.
My client gutted and rebuilt a house they live in. Is the sale taxable?
Usually not. An individual builder's sale is exempt under section 3 when the home was used primarily as their place of residence after the work was substantially completed and no ITC was claimed laws-lois.justice.gc.ca. If the renovation was done to resell, the client is a builder and the sale is taxable
canada.ca.
Who collects the GST/HST on a new home sale?
The builder, as the seller of a taxable supply. It becomes payable on the earlier of the ownership transfer and the possession transfer canada.ca. Any new housing rebate the builder credits at closing is covered on the new housing rebate page.
Which rate applies in each province?
GST of 5% applies in Alberta, British Columbia, Manitoba, Quebec, Saskatchewan and the territories; HST is 13% in Ontario, 14% in Nova Scotia and 15% in New Brunswick, Newfoundland and Labrador and Prince Edward Island canada.ca. The full table is on the 2026 HST rates by province page.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.