Home Renovation Refund (NRRRPR)

1. Can I apply for an HST rebate after a large-scale renovation of my primary residence in Canada?

Yes, under eligible conditions, homeowners may be eligible to apply for the GST/HST New Housing Rebate after a substantial renovation of their primary residence.

CRA regulations state that if an individual renovates their existing home themselves or hires a contractor to perform a substantial renovation, and plans to use the home as their primary place of residence or that of an eligible relative, they may qualify for a rebate.

2. What level of renovation does the CRA consider a Substantial Renovation?

Ordinary renovations are usually not enough.

The CRA generally requires approximately 90% or more of the existing home's interior to be removed or replaced to meet the substantial renovation standard.

When calculating the 90%, the focus is on the home's livable areas. Foundations, exterior walls, load-bearing walls, floors, and stairs are typically not directly included in the 90% test. Non-living spaces such as garages and crawl spaces are also usually not counted.

Therefore, simply replacing kitchens, bathrooms, flooring, and paint is usually not sufficient to automatically meet the CRA's substantial renovation requirements.

3. Can I apply for an HST Renovation Rebate for renovating a kitchen, bathroom, and basement?

It depends on the scale of the overall home renovation.

If only the kitchen, bathroom, flooring, cabinets, or basement are being renovated, these items alone usually do not qualify as a substantial renovation.

The CRA looks at whether approximately 90% of the home's interior has been removed or replaced, not how much money was spent on the renovation.

If the basement is already finished and constitutes an actual livable area, the CRA may include it in the livable area when determining a substantial renovation.

4. What is the maximum HST rebate I can get for renovating my primary residence?

The federal GST/HST New Housing Rebate, under eligible conditions, can rebate a portion of the federal component of the GST or HST paid.

The CRA currently states that, in general, 36% of the federal portion can be rebated, with a maximum federal rebate of up to $6,300. The value of the home and whether there is an additional provincial rebate in the province must also be considered.

The actual rebate amount needs to be calculated based on a combination of:

• The value of the home after the renovation
• Eligible construction costs
• GST/HST paid
• The province where the home is located
• The specific application type

5. Are there any restrictions on the value of the home for the HST rebate on primary residence renovations?

Yes.

For the federal component of the traditional GST/HST New Housing Rebate, the CRA states that, where applicable, if the purchase price of the home or, in relevant circumstances, the fair market value (FMV) reaches $450,000 or more, the federal New Housing Rebate typically cannot be obtained.

However, HST rebate rules may vary by province, so one cannot solely rely on the $450,000 figure to determine if the entire application is completely ineligible for a rebate.

Therefore, the FMV appraisal of the home after the renovation is a very important piece of information when assessing rebate eligibility.