Understanding Enhanced HST Rebates for New Homes (in Ontario)

Understanding Enhanced HST Rebates for New Homes (in Ontario)

If you’ve been shopping for a newly built home in Ontario, you’ve probably heard people talking about a “13% HST rebate” or savings of “up to $130,000.”

While those statements are technically true, the way these rebates work is a little more nuanced.

Here’s a breakdown of the current enhanced HST rebate programs and what they could mean for your purchase.

The HST on New Homes

In Ontario, newly built homes are generally subject to 13% HST, made up of:

  • 5% Federal GST
  • 8% Ontario Provincial Portion

Historically, buyers were only eligible for limited HST rebates, and many purchasers did not qualify for the full amount. That has changed with the introduction of the enhanced federal and provincial rebate programs.

The Federal Rebate (5%)

The federal government introduced an enhanced rebate that effectively removes the 5% federal portion of the HST for eligible purchasers of qualifying new homes.

For qualifying homes, this represents savings of up to $50,000. Eligibility is subject to the program requirements established by the federal government.

Ontario’s Enhanced Rebate (8%)

Ontario has also introduced a temporary enhanced rebate that provides relief on the 8% provincial portion of the HST.

The rebate works as follows:

  • Homes priced up to $1,000,000 receive a rebate equal to the full 8% provincial portion of the HST (up to $80,000).
  • Homes between $1,000,000 and $1,500,000 continue to receive the maximum $80,000 provincial rebate.
  • Homes between $1,500,000 and $1,850,000 receive a gradually reduced rebate.
  • Homes over $1,850,000 revert to the existing Ontario new housing rebate of up to $24,000.

Combined Savings of Up to $130,000

When the enhanced federal and Ontario rebates are combined, eligible buyers may receive:

  • Up to $50,000 from the federal portion.
  • Up to $80,000 from the Ontario portion.

That’s a combined maximum rebate of up to $130,000 on qualifying new homes.

Do You Have to Be a First-Time Home Buyer?

One of the biggest misconceptions is that these rebates are only available to first-time buyers, due partly to the fact that the original rebate was this case.

The temporary Ontario enhanced rebate is available to eligible purchasers, not just first-time home buyers, provided the purchase meets the program requirements. In most cases, the Agreement of Purchase and Sale must have been signed between April 1, 2026 and March 31, 2027, and the home must be intended as the buyer’s primary residence.

Why Pricing Can Be Confusing

If you’ve looked at several builders, you’ve probably noticed that pricing isn’t always presented the same way.

Some builders advertise prices that already include the assigned HST rebates, while others list the purchase price before rebates are applied. This can make it difficult to compare homes unless you understand exactly how each builder has structured their pricing.

It’s always worth asking:

  • Are the rebates already included?
  • Will the rebate be credited on closing?
  • What is my actual purchase price after all applicable rebates?

Final Thoughts

These enhanced HST rebates represent one of the most significant affordability measures introduced for Ontario’s new home market in recent years.

Because the rules are new and continue to evolve, there is still confusion around eligibility, pricing, and how builders apply the rebates. Before purchasing a new construction home, it’s important to understand exactly what incentives apply to your situation and how they affect your final purchase price.

If you’re considering buying new construction, I’d be happy to help you navigate the numbers and compare builders so you know exactly what you’re paying—and what rebates you may be entitled to.

Disclaimer: This article is intended for general information only and should not be considered legal or tax advice. Eligibility for federal and Ontario HST rebates depends on your individual circumstances and the applicable legislation. Buyers should consult their lawyer or tax professional to confirm eligibility.