Key Takeaways
- A standard bathroom renovation does not qualify for the GST/HST new housing rebate on its own.
- The rebate can apply to a “substantially renovated” home, which generally means all or substantially all (about 90% or more) of the interior has been removed or replaced.
- If you just bought a new home, your rebate covers the purchase price, not upgrades you hire a separate contractor for after closing.
- Planning a renovation with your rebate rules in mind can help you avoid surprises at tax time.
Many new homeowners in Ontario start thinking about upgrades the moment they get their keys. A builder-grade bathroom is often the first thing on the list. That naturally raises a question we hear a lot: does a bathroom renovation count toward the GST/HST new housing rebate?
The short answer is usually no. But there are a few situations where renovation work and the rebate do overlap, and knowing the difference can save you money and paperwork.
What the New Housing Rebate Actually Covers
The GST/HST new housing rebate is designed to give back part of the tax paid on a newly built home or a home that has been substantially renovated. In Ontario, there are two parts: the federal portion and the Ontario portion of the HST. The rebate is based on the price of the home itself and is typically claimed by the buyer or credited by the builder at closing.
What it does not cover is ordinary home improvement. Replacing a vanity, retiling a shower, or swapping a tub for a walk-in shower are all considered regular renovations. You pay HST on that work, and it is not refunded through the new housing rebate.
When Does a Renovation Qualify?
The CRA uses the term “substantially renovated house.” This is a high bar. Generally, it means all or substantially all of the interior of the home has been removed or replaced, which the CRA interprets as roughly 90% or more. Think of a full gut job where walls, floors, plumbing, wiring, and fixtures throughout the house are replaced, not just one or two rooms.
If you buy a home that a builder has substantially renovated, or you substantially renovate a home yourself (an owner-built project), you may be eligible to apply. A single bathroom renovation, even a high-end one, will not meet this test on its own.
Renovations as part of a larger project
If a bathroom is being redone as part of a whole-home renovation that does meet the “substantially renovated” definition, the cost of that bathroom work can form part of the overall project. In that case, keep detailed invoices from every trade, since you will need them to support your application.
Upgrades Before vs. After Closing
Timing matters if you are buying a brand-new home. Upgrades you choose through your builder before closing, like better tile or an upgraded shower, are usually built into the purchase price. That means they are part of the price used to calculate your rebate.
Work you hire an independent contractor to do after you move in is a separate service. It is not part of the home’s purchase price, so it does not affect your rebate. Some buyers prefer this route anyway, because they get more design freedom and can choose their own renovation team.
Planning a Bathroom Renovation in a North York Home
North York has a wide mix of housing, from post-war bungalows in Don Mills and Bathurst Manor to new custom homes in Willowdale and condo towers along Yonge Street. Each type of home has its own renovation challenges, from old galvanized plumbing to strict condo board rules about noise and water shut-offs.
If you are planning a bathroom renovation in North York, working with a team that handles design, permits, and trades in one place keeps things simpler. iRemodel brings 20+ years of experience to North York homes and condos, and manages the full project so you are not coordinating multiple contractors yourself.
A few tips before you start:
- Keep all invoices and contracts, especially if your project is part of a larger renovation.
- Check whether your project needs a building permit, particularly if you are moving plumbing or changing walls.
- If you just closed on a new home, confirm your rebate has been processed before starting major work, so your paperwork stays clean.
Frequently Asked Questions
Can I claim HST back on a bathroom renovation?
Not through the new housing rebate. A regular bathroom renovation is treated as a home improvement, and the HST you pay on it is not refunded unless the work is part of a substantial renovation of the whole home.
What counts as a substantial renovation?
Generally, all or substantially all (about 90% or more) of the interior of the home must be removed or replaced. Renovating one or two rooms does not meet this definition.
Do builder upgrades affect my new housing rebate?
Upgrades purchased from your builder before closing are usually included in the home’s purchase price, so they are part of the rebate calculation. Work done by a separate contractor after closing is not.
Should I renovate before or after applying for my rebate?
For a new home, it is usually best to make sure your rebate is filed and processed first. That keeps your purchase and your renovation clearly separate.
Get Help With Your Rebate
Every situation is a little different. If you are not sure whether your home or renovation project qualifies, reach out to our team. We can review your case and help you file your GST/HST new housing rebate correctly the first time.
