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The HST/GST Rebate and One’s Primary Place of Residence

By Kormans LLP

A vital question that buyers of new-build residential properties will be faced with is “whether the property will be used as their primary place of residence?”. This fundamental question can determine the fate of the buyer’s eligibility to receive the GST/HST New Residential Property Rebate (“Rebate”) applicable to the purchase of new construction homes/condominium units. According to the Canada Revenue Agency (“CRA”), one of the very few pre-requisites to qualify for this Rebate is, at the time an individual becomes liable or assumes liability under an agreement of purchase and sale, the individual must be acquiring the new housing for use as the primary place of residence of the individual or a relation of the individual1.


For some buyers, the question as to whether the home they are purchasing will be used as their primary residence is very simple. For others, this question can be quite complex, depending on a multitude of factors, such as lifestyle, family dynamic, employment, etc. Often, the question is followed-up with secondary inquiries, such as: What constitutes a primary residence? Why is the government fixated on knowing if this property will be used as my primary residence?


A good place to start when being faced with these questions is to understand the government’s intention in providing this Rebate which is to offer homeowners a sense of financial relief from the many additional costs associated with buying new construction homes.  It is not the government’s objective to provide this added assistance to those looking at new build properties as commodity investments, and thereby contributing to further market saturation, as applicable taxes will in most cases apply to such transactions. Secondly, understanding what the definition of a primary residence is, and illustrating scenarios that may apply to a given buyer’s lifestyle, allows the buyer to still benefit from the relief applicable to new construction properties.


The threshold of what qualifies as a primary place of residence can be quite unclear, as for some it is determined on a case-by-case basis. According to the CRA, “Where an individual has more than one place of residence, the place of residence that is not first in order of importance to that individual would be that individual's secondary place of residence as it would be subordinate to the primary place of residence2. For example, if the property is used mainly for recreational purposes such as a cottage or is occupied less than one’s other property, then this will likely not qualify as a primary place of residence, and additional taxes may be applicable on both the purchase and on the sale of the property. The CRA continues to explain certain criteria indicative of a primary place of residence, some of which include:


  • Whether or not the purchaser has changed or will be changing his or her mailing address to that of the new house as shown on income tax forms, voting records, municipal tax bills, and/or telephone listings.
  • Whether or not the purchaser has moved most of his or her personal effects into the house.
  • Whether or not the purchaser has insured the new house as his or her personal residence; and where the purchaser owns another place of residence.


Of additional importance, is that a Canadian taxpayer may only designate one home as their primary residence for a particular year, which may limit the number of real estate transactions one will conduct in a given tax year.


Based on the definition and criteria described above, the government understands that some buyers, while still acting in good faith, will not “reach the threshold” of buying a property that will classify as their primary place of residence. This is the likely reasoning behind the emphasis “that so long as the first individual to occupy the new housing is of a relation to the buyer listed on the Agreement of Purchase and Sale” the Rebate will still be applicable.


The notion of a person being of relation to the buyer is far less ambiguous. According to the Exercise Tax Act, a person of relation shall be a person of blood relationship, marriage, common-law partnership, or adoption. It is important to note that someone who does not fall into one of the said categories will subject the property to additional tax on closing. These “non-relations” can include but are not limited to aunts, uncles, a fiancé, or cousins.


If you have any legal questions regarding  the purchase of your new construction home or condominium unit, please do not hesitate to contact us to speak with one of our lawyers at (905) 270-6660 or




1 GST/HST Policy Statement P-228 Primary Place of Residence, page 3 for a discussion on an individual's "intention" when acquiring the new housing.

2 GST/HST Policy Statement P-228 Primary Place of Residence,





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Daniel Kuchuk


Daniel Kuchuk is an Associate Lawyer at Kormans LLP. You can reach Daniel at

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