For eligible buyers of newly-built homes, receive a full HST rebate (13%) off your home price up to $1M, and a partial rebate up to $1.8M.
This rebate initiative is hoping to solve (at least) two problems at once — the wilting housing construction market and helping more in the province afford a home.
An Important Heads Up! The Ontario HST rebate covers a one-year period (see dates below) but isn't fully in effect.
While the provincial legislation has been passed, federal legislation is still pending (it may take until Fall to go through) before the full rebate can be claimed.
In the meantime, many builders are already factoring the rebate into purchase agreements.
In cooperation with the federal government, Ontario has announced a full HST rebate window that allows buyers of eligible new-build properties to avoid paying a hefty 13% tax, which can amount to $130K on a $1M priced home. The rebate claim is limited to one year, from April 1, 2026, to March 31, 2027.
Is this rebate a 'Hail Mary' to help boost Ontario's ailing new-home markets? It certainly seems to offer substantial relief for new-home buyers, aiming to improve the province's housing affordability and support job creation in the housing sector, while addressing the decline in pre-construction home values.
Ultimately, the rebate aims to encourage Ontarians to buy a newly built home — sooner, rather than later. Here's what it means for your home-buying decisions.
In Ontario, 5% federal GST and 8% provincial sales tax = 13% HST
On every new primary home built in Canada, federal GST (Good and Services Tax) is charged to the buyer. In some provinces, an additional sales tax is also charged, with those funds going directly to the province.
Ontario is one province (there are others, such as New Brunswick and PEI) that combines the GST and the provincial sales tax into a Harmonized Sales Tax (HST). The entire HST is collected and managed by the federal government through the Canada Revenue Agency (CRA), which then remits the sales tax portion to the province.
In Ontario, the sales tax portion is 8%, which, added to the GST, gives a 13% HST charged on a new home.
Effective from March 2025, the federal Liberal government now allows eligible first-time buyers across Canada to apply for a GST rebate when buying brand-new homes.
Now, the Ontario government wants all buyers of new builds in their province, including first-timers, to save the full HST for a limited time.
The new rebate amount you can apply for depends on eligibility and the purchase price of your newly built home:
Yes, there is a long-standing, pre-existing GST/HST rebate administered by the CRA — and if you've ever filed a GST return, it's a standard line item.
It consists of two components: a federal portion (5% GST) capped at approximately $6,000, and an Ontario portion (8% provincial component of HST) capped at $24,000. But that long-standing rebate also comes with a price cap, so homes above $450,000 receive no meaningful rebate at all.
Compared to the previous rebate, the 2026 rebate expansion, even for a short time, is considered a big deal — offering substantially more savings for buyers of newly built homes.
Does the Ontario HST rebate still allow you to access government savings programs, such as the RRSP-HBP and FHSA, to supply your down payment? Yes, these first-timer programs aren't impacted by the HST rebate.
Download the best ever First-Time Home Buyer's Guide here (it's free) for more ways to save on your dream home.
Whether you're a first-time home buyer or a repeat one, all buyers of new-build homes in Ontario are eligible for the HST rebate, with a home purchase agreement signed from April 1, 2026, to March 31, 2027.
The rebate can also apply to investors buying residential rental properties, and newcomers and permanent residents.
There are also important construction start and stop dates that impact eligibility — please see the table below.
Note: Other criteria may affect rebate eligibility.
Not all newly built properties in Ontario are eligible for the rebate. The property's purpose should be either as a primary residence or a long-term rental.
Here are the property types that can qualify for a full HST rebate:
Some properties that don't qualify for the full HST rebate:
Note: Other criteria may affect rebate eligibility.
On paper, the HST rebate, which doesn't affect the builder's required revenue for pre-construction financing, should simply be passed on to the buyer, effectively lowering new-home or pre-construction prices — by a lot, if a home is around $1M.
But according to this article, data from the Greater Toronto Area suggest that some builders have raised prices since the HST rebate announcement — baking in a portion of the rebate.
Just enough to keep previous pre-construction projects (and the buyers) from being underwater, which can have a negative effect on final closings, while still being attractive to buyers wanting a price discount from the rebate.
There aren't many who would argue against measures to help out the condo sector, especially in Ontario and the GTA.
Condo market values have plummeted, forcing many who bought (often postage-stamp-sized units) at the height of pandemic fervour to walk away from their purchase contracts and large deposits, being unable to come up with the extra cash needed to bail out builders with the difference.
The HST rebate has led to a recent price boost in some of Ontario's condo markets, but to a lesser degree than in other properties, such as single-detached homes, as this sector is still in recovery and doesn't have the buyers.
Most pre-construction financing is arranged through the builder or developer and often requires an upfront deposit to secure your home purchase while it's being built.
When the construction end is at hand, and it comes time to finalize your home financing, getting your best rate and mortgage can help you save thousands.
With access to traditional, alternative, and private lenders, we know the Ontario housing and rate markets, and our expert brokers go the extra mile to get your deal done — on time and within your budget.
The provincial sales tax portion of the HST has passed through the Ontario legislature. Here's what still needs federal legislation to make the HST rebate official:
Keep in mind that until fully legislated, changes to eligibility criteria may be made.
Because Harmonized Sales Tax (HST) is administered federally, Ontario can't deliver its own rebate without Ottawa amending the Excise Tax Act. The provincial sales tax portion is Ontario's, but the plumbing is federal.
The reality is that changes to the criteria may occur, or the rebate may even be denied by the time the law is brought before the federal legislature. However, it's assumed that both provincial and federal counterparts approved the rebate, and that it is likely to go ahead.
Until then, buyers and builders should still plan for the risk.
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