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HST · GST · Payroll

HST/GST Debt Mortgage — Refinance to Clear Tax Arrears

Owe CRA for HST/GST or payroll source deductions? These are the most time-sensitive tax debts, because they carry a deemed-trust priority. An equity-based refinance pays them out and clears your title — ideally before a lien.

HST · GST · payrollDeemed-trust risk = urgentEquity-based refinanceSelf-employed friendlyBefore or after a lienExit to A
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FSRA #13737| 5-min pre-qualification

Written by the Mortgage Squad Advisors Editorial Team · Reviewed by Surrayya Afzal, Principal Broker, FSRA #13737 · Updated August 2026 · Reviewed quarterly; next review November 2026

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HST/GST and payroll arrears are the CRA debts that escalate fastest. Because you collected these amounts on the government’s behalf, CRA treats non-remittance as especially serious — it can assert a deemed-trust priority that ranks ahead of your existing mortgage, and it enforces these balances aggressively. If your CRA debt is HST/GST or payroll, the window to clear it cheaply is shorter than for income tax, and waiting is costly.

The short answer

HST/GST and payroll (source deduction) arrears are CRA debts you collected on the Crown’s behalf, so they carry a deemed-trust priority and are enforced more aggressively than income tax. A refinance (A-lender before a lien; B-lender or private after) pays them out and clears your title. Because they’re time-sensitive, act early. General information, not legal or tax advice.

What is an HST/GST (or payroll) debt mortgage?

It’s a refinance arranged to pay out CRA HST/GST or payroll source-deduction arrears. These are amounts you collected for the Crown, so CRA can assert a deemed trust that can rank ahead of your mortgage — making them more urgent than income-tax debt. The financing is the same equity-based refinance used for any CRA balance; the difference is the timeline, which is shorter.

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Why HST/GST and payroll arrears are the most urgent CRA debts

When you charge a customer HST/GST or withhold CPP, EI and tax from an employee’s pay, you’re collecting money that belongs to the Crown — effectively holding it in trust until you remit. If you don’t remit, CRA can assert a deemed trust over your assets for the unremitted amount, and that claim can take priority ahead of a secured lender.CRA CRA doesn’t have to register a deemed trust on title,CRA so a clean parcel register doesn’t mean these arrears are harmless to a lender. Payroll source deductions are treated as the most serious of all.

The practical effect is that CRA tends to move faster and harder on these balances than on personal income tax, and lenders are especially wary of them. So if your arrears are HST/GST or payroll, don’t treat the timeline the way you might for an income-tax balance — treat it as shorter, and prioritize clearing it. The precise legal scope of deemed trust and any director liability is a matter for your tax lawyer; we coordinate the financing around that advice.

Built for the self-employed borrower

HST/GST and payroll arrears almost always belong to self-employed and small-business owners — sole proprietors, incorporated contractors, trades, consultants and owner-operators. And those are exactly the borrowers whose income doesn’t show cleanly on a T4, which means they face a double challenge a bank branch isn’t built for: the tax arrears and business-for-self income.

The lenders who solve HST/GST debt are the same ones who understand self-employed income. We document your real income through business bank statements, corporate financials and legitimate add-backs, and place the file with a lender comfortable with both the income and the recent CRA history. The arrears aren’t a dealbreaker — they’re the expected backdrop. See our self-employed CRA debt and self-employed mortgage pages.

How a refinance clears it, and what it costs

The mechanism is the same equity-based refinance used for any CRA balance: new financing sized to cover your existing mortgage, the HST/GST or payroll payout, and costs, with funds flowing lawyer-to-CRA at closing and written confirmation of the paid balance (and removal of any registered lien) for your new lender. Which lender depends on your title and file — A- or B-lender before a lien, B-lender or private after.

Pricing follows the usual ladder: cheapest at an A-lender before a lien, a modest premium at a B-lender, higher but fastest on private — illustratively, the 25 largest private MIEs averaged about 9.6% on single-family loans in Q3 2025 (CMHC), plus fees.CMHC Against CRA’s daily-compounding interest and the deemed-trust enforcement risk, clearing the balance is usually the cheaper path by a wide margin — and often you can consolidate other debt into the same refinance. See the full picture on our CRA debt mortgage hub.

What you get

Why Canadians choose Mortgage Squad Advisors.

Refinance to pay out HST/GST, payroll (source deductions) or corporate tax arrears
Equity-based approval — built for self-employed and small-business owners
Documents business income through bank statements and financials, not just T4s
A-lender path where your title is still clean and you qualify; B/private after a lien
Payout flows lawyer-to-CRA at closing; CRA generally removes a registered lien once paid
Consolidate income tax, cards or a line of credit into the same refinance
All lender, broker and legal fees disclosed in writing before you commit
Plan to refinance back to A-lender pricing once your file stabilizes
How it works

Three simple steps, no pressure.

1

Confirm the balance

Pull your CRA HST/GST or payroll program-account statement so we know the exact amount and periods, and confirm whether anything is registered on title. These debts move faster — the sooner, the better.

2

Structure the payout

A-lender refinance if your title is clean and you qualify; a B-lender or private lender if a lien is registered or income is complex. We disclose rate, LTV, fees and timeline in writing before you commit.

3

Pay CRA + plan exit

Funds flow from your lawyer's trust to CRA at closing, and CRA confirms the payment. We set a target to refinance back to A pricing once your tax history stabilizes.

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FAQ

Common questions, answered.

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Can I get a mortgage to pay off HST/GST debt?
Yes. A refinance can pay out HST/GST (or payroll) arrears at closing, with funds flowing lawyer-to-CRA and written confirmation of the paid balance. Before a lien it can be an A-lender deal where you qualify; after a lien, a B-lender or private lender clears it. It's equity-based.
Why is HST/GST debt more urgent than income tax debt?
Because it's money you collected for the Crown. CRA can assert a deemed trust over unremitted HST/GST and payroll source deductions that can rank ahead of your mortgage,CRA and it enforces these balances more aggressively. Treat the timeline as shorter and act sooner.
I'm self-employed — can you document my income?
Yes — that's the norm for these files. We use business bank statements, corporate financials and legitimate add-backs rather than line 15000 alone, and place the file with a lender comfortable with both self-employed income and recent CRA history. See our self-employed CRA debt page.
What about payroll source deductions?
Same approach, even more urgency. Payroll deductions (CPP, EI, tax withheld from employees) are treated as the most serious CRA debt, with the strongest deemed-trust priority. If you have payroll arrears, call sooner rather than later.
How much does it cost?
Cheapest at an A-lender before a lien; a modest premium at a B-lender; higher but fastest on private (the 25 largest private MIEs averaged ~9.6% on single-family loans in Q3 2025 per CMHC, plus fees).CMHC Usually far cheaper than CRA's compounding interest and enforcement risk. All fees disclosed in writing.
Can I consolidate other debt too?
Often yes — income tax, corporate tax, credit cards or a line of credit 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.
Can I refinance back to a bank afterward?
Yes — once CRA is cleared, title is clean, and you've kept current on filings and remittances (commonly around 12–24 months), we refinance you to A-lender pricing. See our recovery guide.

Related products

CRA debt mortgage (hub)Self-employed CRA debt mortgageSelf-employed mortgagePrivate mortgageB-lender mortgageGuide: HST/GST debtGuide: refinance before a lienCase study: HST refinance before a lienMortgage with a CRA lien

Sources & references

Figures on this page are sourced below and re-checked each quarter. Rates, insurer rules and lender policies change — confirm anything you plan to act on with a licensed advisor.

  1. 1. Canada Mortgage and Housing Corporation (CMHC), Residential Mortgage Industry Report (Q3 2025) — Table 2, top 25 mortgage investment entities (MIEs, a private-lender type): average single-family lending rate 9.6% in Q3 2025.
  2. 2. Canada Revenue Agency (Government of Canada), Debt collection at the CRA (accessed September 2026) — CRA collects tax debts, including GST/HST and payroll debts, and can take legal action to collect if you don't pay. General information, not legal or tax advice.
  3. 3. Canada Revenue Agency, Information on deemed trust (accessed September 2026) — Unremitted payroll source deductions and GST/HST are deemed trust amounts; a deemed trust debt becomes secured to the CRA over all your assets regardless of any security given to other creditors, and CRA does not have to register it in a land titles registry.

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