GST/HST Rebates on New Homes in Ontario

There’s been a lot of noise lately around HST rebates on new home purchases, with headlines suggesting savings of up to $130,000.

In this article, I’ll break down what’s actually behind these numbers.

Background

In Ontario, the purchase of a new home (e.g., a pre-construction condo or newly built house) is generally subject to 13% HST, often embedded in the purchase price.

To offset this cost, the Federal and Ontario governments have historically offered various GST/HST rebate programs - some limited to first-time buyers, others more broadly available.

Recently, both levels of government announced a new joint HST rebate program intended to temporarily boost demand for new housing. Importantly, this program builds on existing rebates and effectively acts as a top-up, allowing for significantly higher total relief.

This new and proposed program (which I will call “Proposed Ontario HST Rebate”) is intended to be:

• More generous - up to $130,000 in HST relief

• Broader in scope - applying beyond first-time home buyers

These newer measures are part of a broader push by governments to stimulate housing supply and demand by making new homes more affordable for buyers and, in turn, encouraging developers to build.

Keep in mind that the Proposed Ontario HST Rebate is not yet law and remains subject to change, including approval by both the Federal and Ontario governments.

In the remainder of this article, we’ll walk through the eligibility, phase-out structure, and a practical example.

Eligibility

To qualify, the property must be:

• A newly built or substantially renovated home (including condo units);

• Purchased (i.e. agreement signed between) April 1, 2026 - March 31, 2027;

• If home is being constructed, certain construction deadline applies; and

• Used as either:

  • A primary residence, or

  • A residential rental property

Notably:

• The expanded Ontario program is not limited to first-time buyers

• It does not have to be used as a primary residence. Therefore, this rebate can apply to investors.

Phase-out Structure

The rebate depends heavily on the purchase price:

• Up to $1.0M

  
  

  → Full rebate (entire 13% HST removed up to $130,000)

• $1.0M – $1.5M

  
  

  → Flat maximum rebate of $130,000

• $1.5M – $1.85M

  
  

  → Rebate gradually declines

• Above $1.85M

  
  

  → Reverts to existing rebate (~$24,000)

Example

Example #1 - Purchase price of $900,000

• HST (13%) = $117,000

• Rebate = $117,000 (fully eliminated)

Example #2 - Purchase price: $1.2M

• HST = $156,000

• Rebate capped at $130,000

Total purchase price with unrebated portion of HST = $1,226,000

Final Thoughts

If you’re considering a purchase or have recently signed an agreement, feel free to reach out—I’m happy to walk through how this applies to you.

Warm regards, 

Francis Do, CPA, CA

Have any questions? Please contact Francis Do at Francis@francisdo.com or 416-572-9633.