HST Rebates on New Construction Homes in Ontario: What Buyers Need to Know

 

If you've priced out a new build in Ontario recently, you've probably noticed the sticker price includes 13% HST that a resale home simply doesn't have. For years, buyers clawed back a modest chunk of that through a fairly small federal and provincial rebate. That changed in 2026 — Ontario now offers relief worth up to $130,000 on qualifying new homes, and a lot of buyers still don't realize they're sitting on it.

Here's what actually applies, who qualifies, and where people trip up when claiming it.

What the HST Rebate on New Homes Actually Covers

Two long-standing rebates apply to most new-construction purchases, and builders typically factor them into your price automatically:

• Federal New Housing Rebate — covers part of the 5% federal GST portion, but phases out entirely for homes priced between $350,000 and $450,000
• Ontario New Housing Rebate — covers part of the 8% provincial portion, capped at $24,000, with no price ceiling

For most of the last decade, that $24,000 provincial cap was the ceiling. It no longer is, and HST and GST filing in Toronto is the starting point for getting these baseline rebates filed correctly.

Ontario's Enhanced Rebate

In 2026, Ontario rolled out the Enhanced New Housing Rebate (ENHR), and — after a few months of legislative back-and-forth — it's now fully in effect, with the CRA publishing final guidance and regulations in June 2026. It's a substantial upgrade:

Home Price	Combined HST Rebate
Up to $1,000,000	Full 13% HST rebated
$1,000,000–$1,500,000	Up to $130,000
$1,500,000–$1,850,000	Gradually reduced to $24,000
Over $1,850,000	$24,000 (the old base rebate)

To qualify, your agreement of purchase and sale needs to be signed between April 1, 2026 and March 31, 2027, construction needs to start by the end of 2028, and it needs to reach substantial completion by the end of 2031 for an owner-occupied home (2029 for a rental). It applies to primary residences and to qualifying rental properties, not just people buying their first home.

On a $900,000 pre-construction unit closing inside that window, that's roughly $117,000 in HST that would otherwise have been baked into your price — a number worth building into your real estate tax planning well before closing day, not after.

Are You Buying to Live In It, Rent It, or Is It Your First Home?

This is where most of the confusion actually happens, because there are effectively three overlapping programs and only one applies cleanly to your situation:

• First-time buyers have their own separate federal rebate (enacted through Bill C-4 in March 2026), applying retroactively to agreements signed as early as March 20, 2025, with its own price thresholds and timeline running through 2030.
• Everyone else buying a new primary residence between April 2026 and March 2027 falls under the broader enhanced rebate above, typically reported as part of a standard personal tax return.
• Landlords and investors renting the unit out instead need the New Residential Rental Property Rebate (NRRP) version, which requires a signed one-year lease as proof of intended use.

If you qualify for more than one program, you get whichever rebate is larger, not both stacked together. Investors holding several new-construction units through a corporation should also have this factored into their corporate tax filings rather than treated as a one-off.

Claiming the Rebate: Where Buyers Get This Wrong

Builders on larger developments typically apply the rebate as a credit against your purchase price at closing, so you never see the full HST amount in the first place. Smaller builders, assignment purchases, and rental properties often don't work this way — you pay the full HST at closing and file for the rebate afterward directly with the CRA, which means paperwork, deadlines, and documentation you're responsible for getting right.

The most common mistakes:

• Filing the wrong rebate form for a rental property instead of a primary residence, or vice versa
• Missing the lease documentation required for the NRRP version
• Assuming the enhanced rebate applies automatically without confirming your agreement date falls inside the eligible window
• Not checking eligibility as a first-time buyer when that program would actually pay out more than the general enhanced rebate

Any of these can mean leaving thousands of dollars unclaimed, or having a rebate denied months after you assumed it was handled — at which point you're usually dealing with a CRA notice rather than a simple form resubmission, which is where CRA audit and dispute support tends to come in.

Conclusion

The good news is real — Ontario's new housing HST relief is now genuinely one of the largest closing-cost savings available to home buyers in the province in years. The catch is that it's split across multiple overlapping programs with different eligibility rules, timelines, and forms, and getting the wrong one wrong can be an expensive mistake to unwind after closing.

Goodaccounting is a CPA-led firm working with individuals and businesses across Toronto and the GTA on personal and corporate tax, bookkeeping, payroll, real estate tax, and incorporation. Book a free consultation today.

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Sources

• Canada Revenue Agency — GST/HST New Housing Rebate
• Canada Revenue Agency — Ontario New Residential Rental Property Rebate (GI-093)
• Toronto Regional Real Estate Board — Ontario Enhanced New Housing Rebate update, June 2026
• Ontario Newsroom — HST Relief Implementation Act (Residential Property Rebates), 2026

 

 

Disclaimer: This article is for general informational purposes only and does not constitute professional accounting, tax, or financial advice. Every business situation is different, and tax laws can change. Please consult a licensed accountant in Brampton or the GTA before making any financial or tax decisions based on this content.