Mortgage Options for HST/GST Debt

Owing the CRA for HST/GST is a different kind of tax debt from personal income tax, and it’s worth understanding why before you finance it. HST/GST is money you collected on the government’s behalf from your customers, so the law treats unremitted amounts as held in trust for the Crown¹. That deemed trust can rank ahead of some secured lenders, which makes an HST/GST balance more time-sensitive than typical income-tax arrears.

The good news is that the financing solution is the same one that works for any CRA debt: an equity-based refinance that pays the balance out and clears your title. This guide covers what makes HST/GST debt distinct and how a mortgage clears it. For the service, see our CRA debt mortgage page. General information, not legal or tax advice; confirm with a tax lawyer or CPA.

When you charge a customer HST/GST, you’re collecting a tax that belongs to the Crown. Under the Excise Tax Act you are deemed to hold it in trust, separate from your own property and despite any security interest, until you remit it¹. Payroll source deductions are deemed trust amounts too².

Three things follow, according to CRA. A deemed trust debt is secured over all your assets without being registered in any public registry, including the land titles office. It ranks ahead of a mortgage registered while the debt already existed; a mortgage registered before the debt arose generally keeps its priority, with some exceptions². And CRA may begin legal action on GST/HST and payroll debts right after you’re notified of them, without the extra warning steps it usually gives on personal debts³.

The practical consequence: treat an HST/GST (or payroll) balance as more urgent than income tax, and expect lenders to ask about it even if nothing shows on title. The exact legal scope of the deemed trust on your file is a matter for your tax lawyer, but the direction is clear: don’t let it sit.

HST/GST arrears almost always belong to the self-employed and small-business owners — sole proprietors, incorporated contractors, consultants, trades, and owner-operators. The pattern is familiar: a strong revenue year, HST collected on invoices, and then the remittance gets deferred to cover cash-flow gaps until it compounds into a balance that’s hard to clear from operating income.

Because these are the same borrowers whose income doesn’t show cleanly on a T4, they face a double challenge — the HST/GST debt and business-for-self income — that a bank branch isn’t built for. The lenders who solve HST/GST debt are the same ones who understand self-employed income, which is exactly why a broker who works both is valuable here. See our self-employed mortgage and self-employed CRA debt pages.

The mechanism is the same equity-based refinance used for any CRA balance. New financing is sized to cover your existing mortgage, the HST/GST payout, and costs. At closing the funds flow through your lawyer’s trust account directly to CRA and the balance is settled, converting a fast-compounding, high-priority tax liability into ordinary amortized mortgage debt. If CRA had registered a lien, it generally removes it once the debt is paid⁴.

Which lender depends on your title and file: before a lien, an A- or B-lender refinance where you qualify (a prime refinance is capped at 80% of your home’s value⁵); after a lien, a B-lender or private lender that clears it at closing. Because a deemed trust doesn’t appear on title, the new lender and your lawyer will want written confirmation from CRA of the exact HST/GST balance to be paid out, and confirmation afterwards that the account is at nil. Where the business is the borrower or guarantor, lenders can also ask CRA for a comfort letter confirming accounts are in good standing².

Pricing follows the usual ladder: cheapest at an A-lender before a lien, a premium at a B-lender, and higher (but fastest) on a private file. For context, CMHC reported that the top 25 mortgage investment entities (a group of private lenders) averaged about a 9.6% rate on single-family loans in Q3 2025⁶, with lender and broker fees usually on top. Against CRA’s compound daily interest⁷ and the enforcement risk on remittance debts, clearing the balance is often the cheaper path, but we run the numbers on your file before you commit.

Often you can consolidate at the same time. If you also carry personal income-tax arrears, corporate tax, credit cards, or a line of credit, these can frequently be folded into the same refinance, replacing several obligations with one mortgage payment. We model the blended cost so you see the real number before committing, and disclose every fee in writing.

Pull your CRA HST/GST program-account statement so you know the exact balance and periods, confirm whether anything is registered against your title, and gather your business income documents. If a lump-sum payout isn’t possible yet, CRA lets businesses set up payment arrangements for GST/HST debts, as long as payments and future filings stay on time⁸. Then map the cheapest pathway that fits your timeline; because HST/GST is time-sensitive, sooner is better.

Mortgage Squad Advisors (FSRA #13737) arranges refinances to clear HST/GST and other CRA debt, works with self-employed income, and coordinates the payout with your lawyer and CPA. Start on our CRA debt mortgage page, or get a confidential assessment (no credit pull to begin). General information only; confirm tax and legal specifics with a licensed professional.