New house tax calculation and reimbursement

New house tax calculation and reimbursement
Alexandre desoutter

You are taxed at 14.975% on the purchase of your new home in Quebec. This percentage corresponds to the GST and QST applied to each new purchase in Quebec. However, you may be eligible for a refund of a portion of these taxes.

Have you just bought a new home and are wondering how much tax you could be reimbursed?

Our new home tax refund calculator, similar to the APCHQ tax calculator, and the accompanying guide are here to help.

Summary

    Calculation and reimbursement of taxes on new homes: what to remember
    What are the taxes on the purchase of a new house in Quebec?
    How does the tax calculation for a new house work?
    New house tax calculator: how does it work?
    New house tax refund: what criteria?
    New home tax refund: which homes are eligible?
    New house tax refund: what thresholds?
    New house tax refund: how long?
    New house tax refund: what steps?

Calculation and reimbursement of taxes on new homes: what to remember

    When buying a new home in Quebec, HST (GST + QST) of 14.475% applies to your purchase.
    You may be eligible for a refund of these taxes, provided you meet certain criteria (primary residence, individual, new house or one that has undergone major renovations, etc.).
    The reimbursement of taxes is subject to reduction thresholds, maximum reimbursement ceilings as explained below.
    If you want to obtain a refund of taxes for a new rental property, this is not the same process, see the dedicated section below.

What are the taxes on the purchase of a new house in Quebec?

When buying a house in Quebec, you have to pay various taxes on the transaction.

    5% GST
    the QST of 9.975%.

The GST and QST applied to your new home therefore generate additional costs of 14.975% when you purchase - which, on a real estate purchase, often represents tens or even hundreds of thousands of euros. To learn more about the GST and QST, see our dedicated guide.

Be aware, however, that you may potentially be eligible for a refund of part of these taxes. To find out more, see our dedicated section below.

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How does the tax calculation for a new house work?

In order to calculate the amount of taxes for the purchase of a new home, you must calculate the amount of GST and the amount of QST separately, then subtract these two amounts from the purchase price before tax.

Even though it hasn't been the case for a very long time, the GST and QST rates can potentially change every year. It is therefore a matter of being vigilant and checking the rate in force. The same applies to the maximum amount of each of these taxes.

To calculate the amount of GST and the amount of QST you will have to pay for the purchase of a new home, here is the formula:

Tax amount = Purchase price before taxes * Tax rate in effect
New house tax calculator: how does it work?

To calculate the taxes on your new home and deduce the rebate you can get, use our tax and rebate calculators below. All you have to do is state the amount of your home and our tool will do the math for you.
New house tax refund: what criteria?

If you are buying a house, you have the option in certain cases of being reimbursed for your amounts of GST and QST applied to your purchase price. To do this, you must meet certain criteria:

Thus, in order for you to benefit from the rebate of the GST and the QST paid for the construction of your house, you must meet the following criteria:

    you bought a new house or a house that has undergone major renovations from a builder
    you have built - or you have hired someone to build - a house on land that you own or rent