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By Jason Heath, CFP on October 2, 2025
Estimated reading time: 5 minutes

By Jason Heath, CFP on October 2, 2025
Estimated reading time: 5 minutes

New homes generally have sales tax payable. What if you build or substantially renovate your home?

When you buy new residential real estate, like a condo or house, you pay sales tax. Depending on your province or territory of residence, this includes goods and services tax (GST), harmonized sales tax (HST), or provincial sales tax (PST). In contrast, resale homes are generally exempt from sales tax. There may be exceptions, like when you buy a property that was used for commercial purposes, including short-term rentals.

There are some unique considerations when you build or substantially renovate a home that are important for anyone considering it. And there may even be rebates available that can put money back into your pocket.

The concept of a so-called substantial renovation is important for residential real estate and sales tax implications. The Canada Revenue Agency (CRA) considers a home to be substantially renovated if 90% or more of the building that existed prior to the work started was renovated to some degree. This percentage is based on the interior area of the building.

The CRA gives several examples of........

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