GST/HST new housing rebate after a substantial renovation: what counts and when to apply

Most renovations, even expensive ones, do not qualify for the GST/HST new housing rebate. A true gut renovation can, and owners who miss the definition or the deadline leave money on the table.

What 'substantial renovation' means

CRA's bulletin B-092 says a substantial renovation removes or replaces all or substantially all of the building that existed before the work began. CRA treats 'all or substantially all' as 90% or more, applied to the interior. The foundation, external walls, interior supporting walls, floors, roof and staircases are left out of the test.

How it is measured

Any fair and reasonable method can be used, such as floor area, floor and wall area, or number of rooms. The cost of the work and the value it adds are not acceptable measures.

What does not count

Repairs are not counted. Patching drywall, painting and sanding floors are not 'removing or replacing'. A fully renovated kitchen alone does not make a project substantial, although it counts toward the total. Additions are generally not counted, unless the work is a major addition that at least doubles the habitable area and integrates the existing home.

Who claims

The individual who owns the housing claims the rebate, whether they do the renovation themselves or hire a contractor. CRA's guide RC4028 explains how to calculate and apply.

The two-year deadline

For an owner-built or substantially renovated house, the claim must be filed within two years after the base date. If you occupy the house after the work is substantially completed, the base date is the date of substantial completion; if you move in earlier, it is the earlier of substantial completion and two years after you or a relation first occupied it. Tax that becomes payable after that two-year point cannot be included. There is also a separate First-Time Home Buyers' GST/HST rebate with its own dates.

Prevention Checklist

• Measure how much of the interior will be removed or replaced, by area or rooms.
• Plan for 90% or more if you want the rebate; partial renovations rarely qualify.
• Keep invoices showing GST/HST paid on materials and services.
• Note the date of substantial completion and when you moved in.
• File within two years of the base date using CRA's guide RC4028.

References

1. Canada Revenue Agency. Technical Information Bulletin B-092: Substantial Renovations and the GST/HST New Housing Rebate, Web page, Definition; 90%; exclusions; examples. Accessed 2026-11-01.
2. Canada Revenue Agency. RC4028 GST/HST New Housing Rebate, Web page, Base date and two-year deadline. Accessed 2026-11-01.

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