Up to $130,000 Back on Your New Home: Understanding Ontario’s New HST Rebates
If you’ve been watching Ontario’s housing market and wondering whether new construction will ever feel within reach again, there’s finally some good news worth paying attention to.
In the spring of 2026, two major new housing rebates landed within weeks of each other; Federal from Ottawa, Provincial from Queen’s Park. Together, they represent a significant housing affordability for Ontarians.
Here’s how it works…
THREE LAYERS OF RELIEF
The new rebates don’t replace the existing framework, they stack on top of it. Think of HST relief as three layers:
Layer 1: The Existing Rebate (since 2010)
The original GST/HST New Housing Rebate has been quietly working in the background of nearly every new-home purchase in Ontario since 2010.
Federal portion: up to $6,300 (phases out between $350,000 and $450,000)
Ontario portion: up to $24,000 (no price cap, every Ontario buyer qualifies)
Maximum total: ~$30,300
In almost all transactions, builders deduct the $24,000 Ontario portion directly from the sticker price. The buyer assigns their right to the rebate to the builder, who then claims it from CRA.
That means the rebate is already baked into most builder contracts you’ll see.
Layer 2: The New Federal Rebate (March 2026)
In March 2026, Bill C-4 introduced the First-Time Home Buyers; GST Rebate:
100% of the 5% federal GST rebated on new homes priced up to $1,000,000
Phases out gradually between $1M and $1.5M
Maximum rebate: $50,000
Eligibility Requirements:
18 or older
A Canadian citizen or permanent resident
A genuine first-time buyer
Here’s where most people stumble: the first-time buyer test is stricter than it sounds. It’s not enough to have never bought a home before. You also can’t have lived in a home owned by you or your spouse (anywhere in the world) during the current calendar year or the four preceding calendar years. The rebate is once-in-a-lifetime per person or couple, and the Agreement of Purchase and Sale must be signed on or after March 20, 2025.
Layer 3: The New Ontario Rebate (March 25, 2026)
In its March 2026 budget, Ontario announced a temporary enhanced HST rebate that:
Refunds up to the full 13% HST (8% provincial portion of HST and the 5% Federal GST) on eligible new homes (subject to a cost-sharing agreement with the federal government).
Has no first-time-buyer requirement
Has no citizenship or PR requirement
Even applies to rental properties (property must be primary place of residence or a residential rental property)
Maximum rebate: $130,000
While the policy is in effect, applications are not yet fully open; further details on the application process are pending as the government updates the Retail Sales Tax Act. We will provide more update on this as it develops.
The catch is that the eligibility window is narrow: The agreement of purchase and sale must be signed between April 1, 2026 and March 31, 2027. Construction must begin on or before
December 31, 2028 and be substantially completed on or before December 31, 2031. After March 31, 2027, the program closes unless renewed
WHAT IT ADDS UP TO
Stack all three layers together and the numbers get significant if the buyer qualifies for maximum amount.
Before You Start Calling Builders
A few practical things to keep in mind:
The mechanics of who applies are still in flux. Depending on when the APS was signed, either the purchaser or the builder may be responsible for filing these rebates. As of now, most builders have not taken a position yet, and purchasers will likely need to apply directly to CRA after closing, paying the full HST upfront and recovering it later. Always have your APS reviewed before signing to confirm whether the builder will handle the rebates on your behalf or whether the responsibility falls to you.
Cancelling and resigning an old agreement does not work. If you signed an APS before the effective date and are tempted to terminate it and re-sign with the same builder after April 1, 2026 to capture the new rebate, don’t. This is expressly prohibited under the federal anti-avoidance rule, and the province is expected to mirror it. The rebate will be disallowed.
Assignments after the cutoff date do not reset the clock. CRA bases eligibility on the date of the original agreement between the builder and the initial purchaser. If you take over a pre-construction contract by way of assignment after April 1, 2026 but the original APS was signed in 2022, the property remains ineligible for the new enhanced rebates. The original signing date is what governs.
NEXT STEPS
If you’re considering a new-build purchase in the next year, this is the moment to plan carefully. The Ontario window closes in less than twelve months. Once it does, the math on every new home in this province changes meaningfully. The difference between capturing the full rebate and losing it often comes down to a timing and execution.
WE ARE HERE TO HELP
If you have any questions about the new HST rebates, how they apply to your transaction, or how to ensure your Agreement of Purchase and Sale is structured to capture every dollar you are entitled to, we are here to help.
Please contact Rose Bahrami at Realty Care Law LLP at 416-491-6866 extension 224, or rose.bahrami@realtycarelaw.com. We would be pleased to review your APS and advise you on next steps.