New build vs resale home: costs, rebates and risks

A new build and a resale home can look similar on the listing, but the buying process differs. New homes usually come with a warranty and modern systems, while resale homes are ready sooner and show you what you get.

The short version: a new build may add GST or HST to the price, which first-time buyers may get back through a federal rebate. A resale home lets you inspect the actual house and close sooner.

Taxes on a new build

On a new build, the price may not include sales tax. GST, or HST in some provinces, applies to most new homes. Many resale homes have no GST at all.

The first-time buyers' GST/HST rebate

A federal rebate now helps first-time buyers of new homes. For agreements signed from March 20, 2025, eligible buyers can get a full rebate of the GST (or the federal part of HST) on new homes valued up to $1 million, with a partial rebate on homes between $1 million and $1.5 million. At $1.5 million or more, no rebate applies. The maximum is $50,000.

• Who qualifies: you must be at least 18, a Canadian citizen or permanent resident, and have not lived in a home you or your spouse or partner owned in the current year or the four previous years.
• Use: it must be your primary residence, and you must be its first occupant.
• Claim: by builder credit at closing or by filing a form with the CRA, such as Form GST190 for homes bought from a builder.
• Ontario: a separate Ontario New Housing Rebate may recover some of the provincial portion of the HST on qualifying new homes, but its eligibility and maximum differ from the federal first-time buyer rebate.

What else is different

• Extras: builders charge for upgrades, lot fees and development charges. Read what the price includes.
• Timeline: closing dates can move, and pre-construction homes can close months or years later.
• Deposits: they are paid in stages.
• Rate hold: you may need a long rate hold on a pre-construction purchase.
• Warranty: provinces have programs for new homes. In Ontario, Tarion's warranty covers defects in work and materials for one year, certain systems and water penetration for two years, and major structural defects for seven years.

Resale homes

With a resale, you can inspect the actual house and often close faster, but may face repairs sooner. Prices are negotiable, and you can see the neighbourhood as it is.

Compare

• Price: check what taxes, fees and upgrades are included.
• Timeline: new builds can close months or years later.
• Condition: new has warranties; resale needs an inspection.
• Costs after buying: new homes need landscaping, blinds and fixtures, while resale may need repairs.

Example

A $900,000 new condo could carry up to $45,000 in GST. The rebate could reduce that substantially for a qualifying first-time buyer.

Rules and amounts can change, so confirm them with the CRA and a real estate lawyer before you buy.

Sources: CRA: First-time home buyers' GST/HST rebate, Tarion: warranty coverage.