GST, Deposits & Incentives on New Builds in Alberta

GST in Alberta is 5%. Alberta has no provincial sales tax, so there is no additional provincial sales-tax component on top of the federal GST (Canada Revenue Agency). On a straightforward $600,000 taxable new-home purchase before any rebate, for example, 5% GST is $30,000.

The reason GST appears on a new build but usually not on the resale home down the street is the tax treatment of the property. New homes sold by builders are generally taxable. Sales of used owner-occupied homes are generally exempt where the seller is not considered a builder for GST purposes (CRA: sales by individuals of owner-occupied homes). GST can also apply to a home that has been substantially renovated, even though the structure itself is not new. CRA generally uses a 90% test for substantial renovations: roughly 90% or more of the interior of the existing home must be removed or replaced, excluding certain structural components (CRA).

For most Calgary buyers purchasing directly from a builder, though, the first practical question is much simpler: is the price I am looking at before GST or after GST? The second is: does that price already assume I qualify for a rebate? Those are not questions we like leaving until the statement of adjustments arrives.

The builder may already be showing you a price net of the rebate. A builder can pay or credit an eligible new-housing rebate to the buyer rather than requiring the buyer to pay the full amount and wait for the CRA to send the rebate afterward. When that happens, the builder files the applicable rebate paperwork with the CRA and credits the rebate against the amount the buyer owes (CRA: GST/HST New Housing Rebate guide). That can make the advertised and contractual pricing look simpler. It also makes the eligibility assumption more important. If a price has been calculated on the assumption that you qualify for a particular rebate, we want to know that before signing and understand what the agreement says happens if you ultimately do not qualify.

Do not stop at "GST included." Ask: is GST included before or after any assumed rebate? Which rebate is being assumed? What amount has been credited? And what happens under the agreement if CRA determines I am not eligible? That tells you considerably more.

There are currently two federal new-housing rebate mechanisms relevant to an Alberta buyer purchasing a home for their own use. The first is the long-standing GST/HST New Housing Rebate. The second is the newer First-Time Home Buyers' GST/HST Rebate that became law in March 2026.

They should not be thought of as two rebates that simply stack on top of one another. CRA describes the first-time buyer rebate as a top-up to the existing new-housing rebate where both apply. The objective is to bring an eligible first-time buyer's total federal rebate up to the amount available under the new program, not to give them the existing rebate plus another $50,000 (CRA: First-Time Home Buyers' GST/HST Rebate). That distinction is worth understanding before we get into the numbers.

The existing GST/HST New Housing Rebate. The long-standing federal rebate can recover part of the GST paid on an eligible new or substantially renovated home used as the buyer's, or a qualifying relation's, primary place of residence (CRA: New Housing Rebate). For a home and land purchased together from a builder, the federal portion works like this: at $350,000 or less, 36% of the GST paid, up to $6,300; more than $350,000 but less than $450,000, the rebate is gradually reduced; at $450,000 or more, no federal GST/HST New Housing Rebate under this program (CRA guide RC4028). Between $350,000 and $450,000, the maximum rebate is calculated using $6,300 × ($450,000 − purchase price) ÷ $100,000, with the purchase price measured before GST.

The obvious problem for a Calgary buyer in 2026 is that those thresholds are low relative to a large part of the new-construction market. That is why the newer first-time buyer rebate changes the conversation so substantially.

The new First-Time Home Buyers' GST/HST Rebate became law when Bill C-4, the Making Life More Affordable for Canadians Act, received Royal Assent on March 12, 2026 (Department of Finance Canada).

For an eligible first-time buyer: a new home valued at $1 million or less can qualify for a rebate of up to 100% of the GST paid, to a maximum of $50,000; between $1 million and $1.5 million, the maximum rebate is gradually reduced; at $1.5 million or more, the rebate is nil (CRA: what the rebate covers). At $1.25 million, for example, the home sits halfway through the phase-out range, so the maximum first-time buyer rebate is $25,000.

This is a meaningful change. A qualifying first-time buyer purchasing a $900,000 new home is dealing with $45,000 of GST. If all of the program requirements are met, the new rebate can recover that full federal GST amount. That is very different from the old rebate, which would provide no federal relief at that purchase price.

The definition is more specific than simply asking whether your name has ever appeared on a land title. Generally, CRA requires that you are at least 18, are a Canadian citizen or permanent resident, have not lived in a home that you or your spouse or common-law partner owned or jointly owned, anywhere in the world, as your primary place of residence during the relevant calendar year or the previous four calendar years, have not previously received the First-Time Home Buyers' GST/HST Rebate, and have a spouse or common-law partner who has not previously received it either (CRA: who can apply).

For a home purchased from a builder, you generally need to meet the first-time buyer test when ownership transfers to you. That timing matters. Someone who signs a purchase agreement for a home completing two years from now needs to qualify when ownership transfers, not simply when the contract is signed.

The dates matter too. For a home and land purchased from a builder, CRA currently requires, among the other eligibility conditions, that the purchase agreement with the builder was entered into on or after March 20, 2025 and before 2031, construction or substantial renovation begins before 2031, construction or substantial renovation is substantially completed before 2036, ownership transfers to the buyer before 2036, the buyer intends to use the property as their primary place of residence, and the buyer is the first individual to occupy it as a residence after construction or substantial renovation is substantially completed (same CRA eligibility page).

There are separate provisions for owner-built homes, homes on leased land, co-operative housing, and other situations. If you are simply buying a conventional Calgary detached home, duplex, townhouse, or condominium directly from a builder, do not make the tax section more complicated than it needs to be. Confirm which CRA category your purchase falls into, then apply the rules for that category.

Yes, if the builder agrees and the eligibility requirements are satisfied. CRA allows the builder selling the home to pay or credit the rebate against the amount payable rather than requiring the buyer to file separately and wait for payment afterward. The builder then submits the rebate application (CRA: how to apply, home purchased from builder).

If the builder does not credit the rebate, the buyer can generally apply directly to the CRA. For a conventional home and land purchased together from a builder, CRA currently provides up to two years from the date ownership transfers to submit the claim when the builder has not credited it. Different application types can use possession rather than ownership as the starting point, so confirm the deadline that applies to your transaction (same CRA page).

The simpler approach is to know how the rebate is being handled before closing.

A builder deposit and a mortgage down payment are related, but they are not the same thing. This causes enough confusion that it is worth separating them immediately.

The builder deposit comes from the contract. There is no single deposit schedule that applies to every Alberta new build. The builder's purchase agreement establishes how much you pay, when you pay it, whether there are several instalments, what conditions apply, and what happens to the money if the purchase does not complete. Alberta's consumer guidance specifically recommends that a new-home contract clearly set out deposits, construction advances, the amount due on closing, and the conditions attached to those payments (Government of Alberta: building a new home).

The structures vary considerably. On our own Calgary builder transactions, one of the more common structures we have seen is roughly 5% once the transaction becomes firm, with no further deposit required. We have also seen builders require approximately 5% at that stage and another 5% later, and on some homes above $1 million we have seen deposits divided into several 5% instalments over the build. Those are examples from transactions we have worked on. They are not Alberta rules, builder-industry standards, or percentages you should expect on your own purchase. Your schedule is whatever your agreement says it is.

That is why we compare the deposit requirements when we compare builders, rather than treating them as an administrative detail after the home has already been chosen.

Ask. This is particularly important because Alberta's mandatory new-home warranty and protection of the money you have paid to the builder are not the same thing. The province describes home warranty insurance and deposit protection insurance separately. Home warranty coverage is mandatory for applicable new homes. Deposit protection insurance is a separate product intended to protect payments made to a builder (Government of Alberta: planning to buy or build).

So for a non-condominium builder purchase, we want to understand what the particular agreement says about who receives the deposit, whether it is held in trust, whether deposit protection insurance applies, what amount is protected, when the money can be released, when it is refundable, what happens if the builder cannot complete, and what happens if the buyer cannot complete.

Do not assume that because the home has mandatory new-home warranty coverage, every dollar you have paid during construction is automatically protected in the same way. They are different questions.

New condominiums have specific trust rules. Under Alberta's Condominium Property Act, money paid by a purchaser under an agreement to purchase a unit, other than rents or security deposits, is required to be held in trust in accordance with the Act. The prescribed trustee must be an active Alberta lawyer or qualifying law firm, and the legislation requires money received by a developer for trust to be transferred to the prescribed trustee within three days, excluding holidays and Saturdays. The regulations also require the trustee to notify the purchaser within 10 days of receiving the trust money (Alberta Condominium Property Act; Condominium Property Regulation). That is a materially different protection from simply assuming every builder deposit on every kind of home sits in the same type of trust account.

Suppose you buy a $500,000 home. Under the current federal minimum down-payment rules, the minimum down payment on a $500,000 purchase is 5%, or $25,000 (Financial Consumer Agency of Canada). Now suppose the builder has already required a $25,000 deposit under the purchase agreement.

If the purchase closes normally, that deposit is ordinarily credited toward the purchase price and can form part of the money you are bringing into the transaction. You do not normally pay a $25,000 builder deposit plus another completely separate $25,000 minimum down payment simply because the two amounts have different names.

But the builder deposit does not change the lender's down-payment requirement. If your lender requires 10% down and you have already paid the builder 5%, you still need to account for the remaining equity required at closing. Similarly, a builder asking for only a small initial deposit does not mean your lender will allow you to buy with a smaller down payment.

One number comes from the purchase agreement. The other comes from the financing. They meet at closing. That is the cleanest way to think about it.

Builder incentives are easier to understand once you stop treating them as a category of free money. They are part of the economics of the sale. That does not make them bad. Some are genuinely valuable. We simply want to know what each one is actually worth before allowing a large advertised number to make the decision for us.

Common forms include design-centre or upgrade credits, included appliances, air conditioning, finished basement development, closing-cost credits, mortgage-rate incentives or buydowns, reduced lot premiums, direct purchase-price reductions, and discounts on completed or quick-possession inventory. Each should be evaluated differently.

A design credit is not the same thing as cash. Suppose the builder gives you a $25,000 design-centre allowance. That may be useful if you were already going to spend $25,000 on those upgrades. It is less useful if the credit can only be spent on items you would not otherwise choose, expires if unused, or is measured against upgrade pricing that is considerably higher than what similar work would cost after possession. We still want to know what the allowance buys. Calling something a $25,000 credit does not establish that it adds $25,000 to the market value of the home.

A rate incentive needs to be compared with the mortgage you could get elsewhere. A builder may sometimes offer financing incentives through a preferred lender. Before deciding that the advertised rate makes the home cheaper, find out which lender is providing it, whether you are required to use that lender, how long the discounted rate applies, what happens afterward, whether there are lender or mortgage restrictions, and what rate and mortgage terms you could obtain independently. A lower rate can have substantial value. We just want to measure the actual financing package rather than the headline.

A price reduction is the easiest incentive to value. If the builder reduces the purchase price by $20,000, the calculation is relatively straightforward. But even here, context matters. The question is not how much the builder took off the original price. It is: what does the home cost now, and how does that compare with my alternatives? A $30,000 reduction on a home that began $40,000 above the comparable market does not suddenly create a bargain. This is why we compare the finished new-build price with competing builders and resale homes rather than measuring value from the builder's original sticker.

We do not publish a list of current builder incentives. Promotions change too quickly. They vary by builder, community, phase, model, lot, inventory level, and sometimes by the particular home. A page that tells you Builder A is currently offering a free basement and Builder B has a $25,000 design credit becomes wrong almost immediately. We would rather explain how to judge an incentive properly. Then, when a buyer is actually comparing homes, we can look at what each builder is offering at that moment and put the offers beside one another.

When we review the financial side of a new build, we separate it into four questions.

1. What is the actual finished purchase price? Include the lot, model, specification, structural changes, upgrades, and anything else required to produce the home you actually intend to buy.

2. How much GST applies, and how is it being shown in the builder's price? Determine whether the price is before or after GST and whether it assumes a rebate.

3. What rebate are you actually eligible for? Do not count a rebate simply because it appears in an advertisement or sample calculation.

4. What money has to leave your account, and when? Map the builder deposits, remaining down payment, upgrade payments, closing costs, and funds required at possession.

Once those four are clear, the transaction becomes much easier to understand. Before a buyer commits to a new build, there are three numbers we want them to be able to explain without opening a brochure: what will the finished home actually cost, how much money do I have to provide before and at possession, and how much GST will I actually bear after any rebate I genuinely qualify for.

That is really the purpose of this page. Not to turn a home buyer into a tax accountant. Just to make sure the money works the way they think it does before they sign the contract.