How does Ontario's new HST rebate work on a new home?

By Oben Necip  ·  VP of Sales and New Developments, Broker Manager

If you are shopping for a new build in Ontario this fall, the tax picture has changed a great deal this year.

Ontario’s expanded HST relief can remove the full 13% HST on a new home up to $1 million that you will live in. Combined provincial and federal relief can reach $130,000, including on homes priced up to $1.5 million. The catch is timing. You must sign your agreement with the builder by March 31, 2027.

Below, we cover who qualifies, how the price tiers work and what a real example looks like. We also share the questions we would ask any builder before you sign.

What is the enhanced new housing rebate?

It is a temporary rebate that relieves some or all of the HST on a newly built home used as a primary residence. HST, the harmonized sales tax, is 13% in Ontario. It is made up of an 8% provincial part and a 5% federal part, and it applies to new homes but not to resale homes.

The relief comes in two pieces. The first is the Ontario enhanced new housing rebate, which covers the provincial 8%. According to the Canada Revenue Agency, it is worth up to $80,000. The second is the Ontario new home affordability payment, which covers the federal 5%. According to the Government of Ontario, it is worth up to $50,000.

That second payment is reduced by any federal rebate you already receive, such as the first-time home buyers’ GST rebate. In other words, the pieces fit together so you are not paid twice for the same tax. Before this program, most buyers could claim only the standard Ontario rebate of up to $24,000.

Who qualifies for the rebate?

You qualify if you are an individual buying a new home from a builder to live in yourself, or for a relation to live in. You do not need to be a first-time buyer. That is the biggest difference from the federal first-time home buyers’ GST rebate, which is limited to first-time buyers.

The CRA lists a few firm conditions. You, or your relation, must be the first person to live in the home once it is finished. The home cannot be used as a rental. Your agreement of purchase and sale must be signed between April 1, 2026, and March 31, 2027.

The home also has construction deadlines. Building must start by December 31, 2028, and the home must be substantially complete by December 31, 2031. That matters for pre-construction, where a project can be sold years before construction starts. If a project has not started, ask the builder where it stands on approvals and financing.

Investors buying to rent are not covered by this rebate. A separate provincial rebate exists for new rental property, with its own rules and dates. If you plan to rent the home out, check those rules on the CRA site before you count on any relief.

How much can you get at different price points?

The rebate covers the full tax up to $1 million, holds at a flat amount up to $1.5 million, then steps down. Here is how the CRA and the Government of Ontario set out the tiers.

Up to $1 million: relief of up to the full 13% HST, so up to $80,000 provincial and $50,000 federal.

$1 million to $1.5 million: a flat $130,000 in combined relief.

$1.5 million to $1.85 million: partial relief that shrinks as the price rises.

$1.85 million and above: only the standard Ontario rebate of up to $24,000.

The flat middle tier is worth a closer look. A buyer at $1.4 million receives the same dollar relief as a buyer at $1 million.

What does the rebate look like on a real purchase?

A worked example makes the numbers easier to follow. The figures below are illustrative round numbers, and they leave out closing costs and the way builders often quote prices with HST included.

Say you agree to buy a new townhouse for $900,000 before tax, and you plan to live in it. The 13% HST on that price is $117,000. That breaks down to $72,000 in provincial tax and $45,000 in federal tax.

Under the enhanced program, both parts can be relieved in full. Under the old rules, the standard Ontario rebate would have covered up to $24,000 of it. On this example, that is a difference of $93,000.

Now say the price is $1.3 million instead. The HST would be $169,000, and the relief is capped at the flat $130,000. You would still owe tax, but far less than before.

Those gaps are why pricing strategy on new homes deserves care right now. The rebate widens the after-tax gap between price points, especially above $1 million. Above $1.5 million, each added dollar of price also means less relief. Two homes a few hundred thousand dollars apart can land far apart after tax.

What should you ask a builder before you sign?

Ask how the rebate is handled in your agreement, because builders do not all treat it the same way. Some credit the relief to you at closing and then claim it from the government. Others expect you to pay the HST and apply to the CRA yourself. The Government of Ontario notes that if the builder credits the relief to you, the builder files the application.

We would put these questions to any builder:

Is the price quoted with HST included or added on top? New home prices in Ontario are often quoted with HST included and the rebate assigned to the builder. Make sure you know which rebate amount the price assumes.

Who claims the rebate, and when? If you are applying yourself, know the paperwork and keep your closing documents. If the builder is crediting it, see it in writing.

When will construction start, and when is completion expected? The rebate depends on the construction deadlines, so a delayed project is a real risk.

What closing adjustments could be added? New builds can carry charges at closing, such as utility connection fees or development charges. Ask for a list and any caps now.

Two consumer protections are worth knowing as well. In Ontario, new home builders must be licensed by the Home Construction Regulatory Authority, and you can look them up before you sign. New condo buyers also get a 10-day cooling-off period under the Condominium Act. It starts once you have both the signed agreement and the disclosure statement. Use that time to have a real estate lawyer review everything.

Does the deadline mean you should buy now?

Maybe, with some caveats. The rebate only applies to agreements signed by March 31, 2027, which is about six months away. Waiting is not a neutral choice, because the savings end on that date.

That timeline is shorter than it sounds. Choosing a project, reviewing the agreement with a lawyer, arranging financing and using the 10-day cooling-off period on a condo all take time. Buyers who start early have more room to compare projects and floor plans carefully.

The caveats still matter. A good purchase comes down to the right home, the right builder and a budget you can carry. The rebate is a meaningful saving, but it works best on a purchase that already makes sense for you. It does not change your mortgage qualification, your deposit schedule or the fact that a pre-construction home may close years from now.

What the rebate does change is the math. If you were already weighing a new build against a resale home, run both numbers with the rebate included. The comparison may look different than it did a year ago.

Quick Questions

Do I have to be a first-time buyer to get Ontario’s expanded HST relief? No. Ontario’s expanded HST relief is open to any individual buying a new home from a builder as a primary residence, as long as the agreement is signed between April 1, 2026, and March 31, 2027. First-time buyers may also qualify for the federal first-time home buyers’ GST rebate.

Can investors claim the enhanced new housing rebate? Not this one. The home must be the primary residence of the buyer or a relation, and it cannot be used as a rental. Ontario offers a separate enhanced rebate for new residential rental property with its own conditions, so check the CRA’s guidance before counting on it.

Does the rebate apply to assignment sales? It can, but both agreements must fall within the program window. The CRA says the original agreement and the assignment agreement must each be entered into between April 1, 2026, and March 31, 2027. An assignment of an older agreement signed before April 2026 would not qualify.

What happens if my pre-construction project is delayed? The rebate has firm construction deadlines. Building must start by December 31, 2028, and be substantially complete by December 31, 2031. Ask the builder about approvals and the expected start date before you sign, and have your lawyer review the agreement.

If you are weighing a new build this fall, our team can walk you through current projects and run the numbers with you. See our new developments or book a strategy session.

Corcoran Horizon Realty

This article is general information, not tax, legal or financial advice. Program details are from the Canada Revenue Agency and the Government of Ontario and are current as of September 21, 2026.