How to calculate your new home GST rebate

# Calculate the new home GST rebate

## You can’t just deduct the GST from your agreed upon price

Calculating the new home GST rebate (Getty Images / Ron Chapple)

Recently a reader—we’ll call him Chuck—wrote in and asked how to calculate the new home GST rebate. He had purchased a new build home from the builder that included the HST. Chuck had no other upgrades and he wanted to know if he could just deduct the HST from the agreed upon price to calculate his rebate.

If only it were that simple.

First, Chuck is responsible for paying the builder the SPNR—the stated price net of rebates—at time of closing. This is the price Chuck agreed to pay to the builder: \$457,000. But he can’t just deduct the HST from this price (since he bought the home in Ontario, he’s subject to HST). Instead, he had to calculate the “consideration” price. This is the price that does not include GST/HST or any rebates.

In Chuck’s case:

Consideration \$ = (SPNR \$ + \$54,350) / 1.193

Consideration \$ = (\$457,000 + \$54,350) / 1.193

Consideration \$ = \$428,625

That means Chuck’s actual cost, net GST/HST, is \$428,625. He must also pay Ontario’s 13% HST which works out to an additional \$55,721.