A buyer who has owned and lived in their own home for the past ten years, and so is not a first-time home buyer, buys a newly built home from a builder in Alberta for $450,000 to use as their primary residence. How does the GST New Housing Rebate apply?
Correct Answer
D) No rebate is available for homes priced at $450,000
The GST New Housing Rebate is 36% of the GST, to a maximum of $6,300, for homes up to $350,000; it phases out between $350,000 and $450,000 and is not available at $450,000 or more. This buyer is not a first-time home buyer, so the separate First-Time Home Buyers' GST rebate does not apply either. No rebate is available, and the buyer pays the full 5% GST of $22,500.
Why This Is the Correct Answer
The New Housing Rebate is available only for new homes valued under $450,000. It is 36% of the GST up to $6,300 for homes up to $350,000, shrinks across the $350,000 to $450,000 band, and is zero at $450,000. Because this buyer is not a first-time home buyer, the FTHB rebate cannot fill the gap, so no rebate is available and the buyer pays the full 5% GST.
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