HST New Home Rebate Ontario: How It Works (2026)

This guide is general information for educational purposes only. It is not legal, tax or financial advice. Speak with a qualified lawyer, accountant or tax professional about your situation.

Ontario's 2026 HST relief can reach $130,000 on eligible new homes up to $1.5 million; eligible purchases at $1.85 million or more may receive up to $24,000.

This is for buyers, investors and rental owners in Toronto who are signing for a new home or a pre-construction unit and want to know one thing: how much of the 13% HST will actually come back to them.

The short answer: on an eligible builder purchase up to $1.5 million that will be your primary residence, with the agreement signed between April 1, 2026 and March 31, 2027, relief can reach $130,000. At $1.85 million or more, an eligible buyer can receive up to $24,000. Landlords have a parallel, separate rebate.

The rules now come in layers. Some are long-standing, some were enacted this spring, and one piece is a provincial payment rather than a tax rebate. Below I set out how each layer works, how I run the numbers for my clients, and where I see buyers make costly assumptions.

How does HST apply to a new home in Ontario?

A newly built home purchased from a builder is generally taxable. A resale home generally is not. In Ontario, the Harmonized Sales Tax (HST, a single sales tax that combines the federal GST and the provincial sales tax) is 13%. It is made up of a federal 5% portion and an 8% provincial portion.

That split matters because every rebate targets one part or the other. Federal rebates reduce the 5%. Ontario rebates reduce the 8%. The Canada Revenue Agency (CRA) administers both, and the builder may pay or credit the rebate to you and submit the application. Otherwise, you apply directly.

Check whether the quoted price includes HST and assumes rebates credited by the builder. If you are ineligible, you may have to repay a rebate even if the builder credited it. Read the agreement closely.

What were the standard new housing rebates before 2026?

Two long-standing rebates still sit underneath everything else.

GST/HST new housing rebate (federal). 36% of the federal part of the tax, up to $6,300. It phases out between $350,000 and $450,000 and is nil at $450,000 or more.
Ontario new housing rebate. 75% of the 8% provincial part, up to $24,000. It is available even where the home is valued at $450,000 or more, provided the buyer meets the other eligibility conditions.

For the owner-occupied purchases discussed here, both generally require the home to be intended as your or a relation’s primary residence, with you or that relation the first occupant. This post focuses on buying the home and land from the same builder; owner-built homes and leased land have different rules.

What is the first-time home buyers' rebate, and is it in force?

Yes. The federal first-time home buyers' (FTHB) GST/HST rebate was enacted through Bill C-4, which received Royal Assent on March 12, 2026. It removes the full 5% federal portion on new homes up to $1 million, to a maximum of $50,000.

Between $1 million and $1.5 million the rebate shrinks in a straight line. The CRA's own example: a $1.25 million home earns $25,000. At $1.5 million or more, there is nothing.

At ownership transfer, you must be at least 18 and a Canadian citizen or permanent resident. You must not have occupied a home owned by you, your spouse or common-law partner as your primary residence in that calendar year or the previous four calendar years, anywhere in the world.

Neither you nor your spouse or common-law partner may have previously received this rebate. For a builder purchase, the agreement must be signed on or after March 20, 2025 and before 2031. Construction must begin before 2031, with substantial completion and ownership transfer before 2036. You must use the home as your primary residence and be its first occupant.

Ontario introduced its own first-time buyer top-up, with different phase-out rules. A federal regulation registered on May 29, 2026 (SOR/2026-94) gives legal effect to a rebate of some or all of the 8% Ontario portion for eligible first-time buyers, deemed in force from March 20, 2025.

What is Ontario's enhanced new housing rebate?

Ontario's enhanced new housing rebate (ENHR) is a temporary top-up, and it is not limited to first-time buyers. It was enacted by federal regulation SOR/2026-130, registered June 12, 2026 and deemed in force April 1, 2026.

Combined with the existing Ontario rebate, the CRA sets out the provincial relief as follows:

Up to $1 million: the full 8%, up to $80,000.
Over $1 million to $1.5 million: a flat $80,000.
Over $1.5 million and below $1.85 million: a reduced amount.
$1.85 million and above: only the standard $24,000.

The timing conditions are strict. The agreement with the builder must be signed between April 1, 2026 and March 31, 2027. Construction must begin by December 31, 2028 and be substantially complete by December 31, 2031.

For a purchase of the home and land from the same builder, HST must become payable by December 31, 2032. The home must be intended as your or a relation’s primary residence, with you or that relation the first occupant; it cannot be intended as a rental.

What about the federal 5% on these homes?

The CRA notes that eligible individuals may also receive the Ontario new home affordability payment (ONHAP), up to $50,000, equivalent to up to 100% of the 5% federal part. It is administered by the Province of Ontario. That is the source of the $130,000 headline: $80,000 provincial plus $50,000 federal-equivalent.

ONHAP is reduced by federal new housing or first-time buyer rebates you are entitled to claim. These amounts cannot simply be added together without accounting for that reduction.

I underwrite ONHAP more conservatively than the rebates. It is a provincial payment layered on a federal tax, and the province, not the Excise Tax Act, sets its mechanics. I count it once the builder confirms in writing how it will be credited.

How much HST will I actually pay?

Here are three hypothetical new homes bought from a builder by a buyer who is not a first-time buyer. Each agreement is signed in May 2026, each home will be the buyer's primary residence, and prices include the land but exclude HST. Assume all occupancy and timing conditions are met and the full applicable ONHAP is received.

Price before HST	HST at 13%	Rebates and relief	HST cost after relief
$900,000	$117,000	$72,000 provincial + $45,000 ONHAP	$0
$1,400,000	$182,000	$80,000 provincial + $50,000 ONHAP	$52,000
$3,500,000	$455,000	$24,000 Ontario new housing rebate	$431,000

The $3.5 million line is the one my luxury clients need to see. The 2026 measures do almost nothing above $1.85 million. The effective tax is roughly 12.3% of value, and that has to be priced into any comparison with a resale home of similar quality.

This is simplified. If an agreement quotes an HST-inclusive price after rebate credits, these calculations cannot be applied directly to that figure. For these builder purchases, the enhanced rebate tests total consideration excluding HST, including any taxable assignment consideration, rather than fair market value. Your accountant should confirm the figures for your file.

Can investors claim a rebate on a new rental property?

Yes, but through a different door. Investors who rent out a new unit claim the new residential rental property (NRRP) rebate instead. The rental rebate rules generally require expected first use as a tenant’s primary residence with continuous occupancy for at least one year, under one or more leases. Statutory exceptions apply.

The Ontario NRRP rebate mirrors the $24,000 owner-occupier cap.

The enhanced Ontario version (ENRRP) extends the 2026 top-up to landlords. Under SOR/2026-130, for units already under construction before April 2026, the purchase agreement must fall in the same April 2026 to March 2027 window and the unit must be substantially completed before 2030. The relevant tax-payable date must also be before 2033.

Units of $1.85 million or more get no enhanced amount.

Purpose-built rental is a separate regime

For eligible multifamily projects, the federal purpose-built rental housing (PBRH) rebate returns 100% of the federal part for projects starting construction after September 13, 2023 and before 2031, with substantial completion before 2036.

A project needs at least four units with private kitchens, bathrooms and living areas (or at least ten units), and 90% held for long-term rental. Ontario has removed the full 8% on qualifying projects as well. I discuss the broader investment case in my multifamily work.

Can an assignment or re-signed agreement qualify?

This is where I see the most wishful thinking.

Re-signing an older contract to enter the new window does not automatically create eligibility. The regulation addresses this. If an agreement made before April 2026 is later varied, altered or assigned so that it looks newer, it is deemed to have been entered into before April 2026.

Both the original builder agreement and the assignment agreement must fall within April 1, 2026 to March 31, 2027. Terminating and replacing an older agreement to obtain the rebate is also subject to anti-avoidance rules. I recommend a tax lawyer review these files.

I covered the broader assignment picture in Pre-Construction in 2026: Distress, Assignments, and the Bill C-4 Reset.

What this means for you

Luxury buyer (above $1.85 million). Budget for up to $24,000 only if you meet the eligibility conditions. The real comparison is a new build against a resale, where HST generally does not apply. Make sure the builder's rebate clause does not leave you owing the $24,000 if you end up not occupying.
Move-up buyer ($1 million to $1.5 million). An eligible agreement signed from April 1, 2026 to March 31, 2027 can provide substantial HST relief. I still weigh builder risk and occupancy timing ahead of the rebate.
Investor buying a unit to rent. Use the NRRP route, document the tenant’s intended primary residence and expected continuous occupancy, and model the enhanced amount only if the agreement date and completion date fit the window.
Rental owner or developer. The PBRH regime is the more durable incentive. Construction must begin before 2031 and be substantially completed before 2036.

I set out my broader view of these measures in Policy Tailwinds: Ontario HST Exemption and Bill C-4.

Frequently asked questions

Do I have to be a first-time buyer to get the 2026 Ontario rebate?

No. The enhanced new housing rebate is available to eligible individuals buying a new home for use as their or a relation’s primary residence under an agreement signed between April 1, 2026 and March 31, 2027.

Is there an HST rebate on a $2 million new home in Ontario?

An eligible owner-occupier buying the home and land from a builder may receive the standard Ontario new housing rebate of up to $24,000. The enhanced amounts stop at $1.85 million, and the federal rebates do not apply at that value.

Can I claim the owner-occupier rebate and then rent the home out?

If you intend to rent it out, you should use the rental property rebate route. The enhanced owner-occupier rebate requires an intended primary residence for you or a relation. A later change in circumstances needs an individual eligibility review.

How long do I have to apply if the builder did not credit the rebate?

For a purchase of the home and land from the same builder, generally two years from the date ownership was transferred to you. If the builder pays or credits it, the builder submits the application.

Sources

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HST New Home Rebate in Ontario: How It Works in 2026