Do You Pay GST on Resale vs. New Construction in BC? Kelowna Realtor Explains
Here’s one of the most expensive mistakes buyers are making in British Columbia’s real estate market: confusing GST on resale homes vs. new construction.
If you’re buying in Kelowna, West Kelowna, or anywhere in the Okanagan, understanding how GST applies could save you thousands of dollars. Let’s break it down in simple terms.
GST on Resale Homes in Kelowna
If you’re buying a resale property (a home that’s already been lived in), GST normally does not apply.
✅ Typical resale homes: no GST
⚠️ Exceptions:
-
Short-term rental or commercial properties
-
Seller is GST-registered
-
GST was deferred when the home was first purchased (can still apply even on a 10–20 year old property!)
👉 Bottom line: Don’t assume GST isn’t applicable. Always ask, confirm with your Realtor, and have your lawyer/accountant verify.
GST on New Construction in BC
For new construction homes, presales, or substantially renovated properties, GST almost always applies.
-
GST is charged at 5% on top of the purchase price (unless the builder includes it).
-
Sometimes developers will include GST in the listing price, but often it’s plus GST.
-
Lenders may or may not include GST in the mortgage amount—check in advance.
💡 Example: On an $800,000 new build in Kelowna, GST adds another $40,000 to the purchase.
Renovated Homes and GST
Another area buyers overlook is substantially renovated homes.
If a property has been significantly updated (to the point it’s considered “new”), GST may apply—even if it looks like a resale.
This is why due diligence is critical before you write an offer.
GST on Leasehold & Westbank First Nation Properties
In Kelowna and West Kelowna, some homes sit on Westbank First Nation (WFN) leasehold land.
-
GST may apply differently on leasehold vs. freehold land.
-
In some cases, GST is applicable on the purchase.
-
Always confirm with a lawyer or accountant before proceeding.
👉 Many buyers miss this detail and end up paying more than expected.
GST on Rental & Short-Term Rental Properties
If you’re buying a short-term rental or investment property, GST can be tricky.
-
Original owners may have deferred GST by registering for GST at purchase.
-
When you buy, deferred GST may become payable—sometimes decades later.
-
This is common in vacation areas like Big White or downtown Kelowna condos.
For buyers: Make sure GST is accounted for in your closing costs.
For sellers: Confirm upfront if GST applies and disclose it in your listing paperwork.
Rebates & Savings on GST
The good news: there are federal GST rebates available, especially for first-time buyers and new builds.
-
Rebates can reduce GST costs if the home is under certain price thresholds.
-
You’ll need to file paperwork (and in some cases, your lawyer or accountant will handle this).
Avoiding a Costly Mistake in Kelowna Real Estate
The biggest takeaway? Never assume GST doesn’t apply.
Even on older homes or resale properties, exceptions exist. A $50,000 mistake is possible if you don’t clarify upfront.
Final Thoughts: Work With a Local Kelowna Realtor
Understanding GST is one part of making a smart move in the Kelowna real estate market.
As your local Kelowna Realtor, I’ll help you:
-
Ask the right questions before you buy.
-
Confirm if GST is included, excluded, or deferred.
-
Avoid costly surprises on closing day.
If you’re buying or selling in Kelowna, reach out anytime. I’ll send you our “GST Questions to Ask Before You Buy” guide so you’re fully prepared.
📩 Subscribe to my weekly real estate insights → Here
📱 Download my Kelowna home search app → https://goagent.ca/33DC752D (Access Code: 33DC752D)
Frequently Asked Questions About GST in Kelowna Real Estate
Do you pay GST on a resale home in BC?
Generally, no. Resale homes that have been lived in are usually exempt from GST. However, exceptions exist for properties used as short-term rentals, GST-registered sellers, or homes where GST was deferred at the original purchase. Always confirm before buying.
Does GST apply to new construction in Kelowna?
Yes. GST is charged on new builds, presale condos, and substantially renovated properties. It’s typically 5% of the purchase price unless the builder includes it in the listing.
Can GST apply to older homes?
Yes, in some cases. If GST was deferred when the property was first purchased, it can still be payable—even on homes 10–20 years old. This is especially common in vacation areas like Big White.
Do you pay GST on Westbank First Nation (WFN) leasehold land?
Sometimes. GST may apply differently on leasehold vs. freehold land. It depends on the property and the type of purchase. Legal or accounting advice is highly recommended before making an offer.
Can you get a GST rebate when buying a home?
Yes. Federal GST rebates are available for qualifying buyers, especially for new homes under specific price thresholds. Your lawyer or accountant can help file the rebate paperwork.
What’s the biggest mistake buyers make with GST?
Assuming it doesn’t apply. Even resale homes can carry GST in certain situations. Buyers should always ask their Realtor, lawyer, and accountant to confirm.
About Mark & Maddie
We’re Mark & Maddie, Selling Kelowna Real Estate Group | eXp Realty.
Trusted Kelowna real estate agents, helping buyers and sellers navigate one of BC’s fastest-moving housing markets with clarity, strategy, and confidence.
Your trusted Kelowna Realtors® for buying and selling real estate in the Okanagan.
Mark and Maddie Coons
Selling Kelowna Real Estate Group
Tel: 778-744-0872
