Understanding HST Rebates on New Construction Homes
One thing buyers should know is that during this transition period to the new enhanced HST rebate programs, builders are handling pricing differently.
When you see a price on an MLS listing or builder price sheet, that price may include all of the HST, some of the HST, or assume that certain rebates have already been assigned to the builder. Historically, many builders have advertised prices that already included the existing $24,000 Ontario HST rebate, but there is currently no universal approach to how the new enhanced rebates are being reflected in advertised pricing.
As a result, comparing one new construction home to another isn’t always as straightforward as it appears. The actual amount you pay can vary depending on how the builder has structured their pricing and which rebates you qualify for. The enhanced rebate programs can provide up to $130,000 in HST savings on eligible homes, but the way those savings are reflected in advertised prices may differ from builder to builder.
Before assuming a price includes (or excludes) HST, reach out to me. I’ll break down the numbers, explain exactly what is included, and help you understand the true cost of the home so there are no surprises.
Enhanced Federal + Ontario HST Rebate
The government has introduced enhanced HST rebates designed to reduce or eliminate HST on new construction homes.
Federal Rebate (5% GST Portion)
- Homes up to $1,000,000 → 100% of the federal GST is rebated (up to $50,000)
- Homes between $1,000,000 and $1,500,000 → rebate gradually decreases
- Homes over $1,500,000 → no federal rebate
Ontario Rebate (8% Provincial Portion)
Ontario has enhanced its rebate program to mirror the federal relief:
- Homes up to $1,000,000 → 100% of the provincial HST is rebated (up to $80,000)
- Homes above $1,000,000 receive reduced relief based on value
- The enhanced rebate replaces the old system where the maximum Ontario rebate was $24,000
What Does This Mean for Buyers?
For a qualifying new home purchase of $1,000,000 or less, buyers can potentially recover:
- Federal GST rebate: up to $50,000
- Ontario HST rebate: up to $80,000
- Total HST savings: up to $130,000
Existing Ontario New Housing Rebate (Available to Most Buyers Who Will Use Home as Primary Residence)
The Ontario portion of the HST is 8%. When purchasing a new construction home as a primary residence, buyers can receive an Ontario New Housing Rebate of up to $24,000. Unlike the federal rebate, the Ontario rebate does not phase out based on purchase price and is generally available regardless of the home’s value, provided the eligibility requirements are met.
New Federal First-Time Home Buyer GST Rebate
The federal government introduced a new rebate for first-time home buyers purchasing a newly built home:
- Up to 100% of the 5% federal GST is rebated on homes priced up to $1 million
- Maximum savings of $50,000
- Rebate gradually phases out between $1 million and $1.5 million
- No rebate available above $1.5 million
- Applies to new homes and substantially renovated homes intended as the buyer's primary residence
- Purchase agreement must generally have been entered into on or after March 20, 2025 and before 2031.
Ontario First-Time Home Buyer HST Rebate
Ontario will mirror the federal program by rebating the full 8% provincial portion of HST for eligible first-time home buyers:
- Full rebate on homes up to $1 million
- Phased out between $1 million and $1.5 million
- Maximum provincial savings of $80,000
- Intended to work alongside the federal rebate program.
Potential Combined Savings
For an eligible first-time buyer purchasing a new home under $1 million:
- Federal rebate: up to $50,000
- Ontario rebate: up to $80,000
- Total potential HST savings: up to $130,000.