Ontario's Expanded HST New Home Rebate: A Complete Guide

If you're buying or building a new home in Ontario, a temporary but significant change to the HST New Home Rebate program deserves your attention. For purchase agreements signed within a specific window, eligible buyers can receive up to $130,000 in tax relief — one of the most substantial government incentives for new construction in recent memory.

Here's everything you need to know, including a significant caveat that buyers should be aware of.

What Is the HST New Home Rebate?

When you purchase a newly constructed home in Ontario, you're typically required to pay the full 13% Harmonized Sales Tax (HST) on the purchase price. Though sales tax is generally included in the list price that developers provide to consumers, the HST New Home Rebate is designed to offset a portion of that burden, particularly for buyers at lower price points. Historically, the rebate maxed out at $24,000—fully erasing the HST for properties up to $450,000—a threshold that became increasingly disconnected from Ontario's housing market realities.

The 2026–2027 expansion addresses that gap in a meaningful way.

The Enhanced Rebate Structure

For qualifying purchases, the rebate is structured as follows, based on the purchase price or fair market value of the home:

Purchase Price	Rebate
Up to $1,000,000	Full rebate of 13% HST (maximum $130,000)
$1,000,000 – $1,500,000	Flat cap of $130,000
$1,500,000 – $1,850,000	Sliding scale from $130,000 down to $24,000
Over $1,850,000	Standard provincial rebate of up to $24,000

To put this in practical terms: a buyer purchasing a newly built home for $900,000 could save up to $117,000 in HST. At $1.2 million, the full $130,000 cap applies. Above $1,500,000, the rebate declines on a sliding scale from $130,000 to $24,000, but even at the higher end, the legacy rebate of up to $24,000 remains available.

Key Eligibility Requirements

The enhanced rebate comes with specific conditions that must be met. Here's what you need to know before assuming you qualify:

1. Purchase Timeline

The Agreement of Purchase and Sale (APS) must be signed between April 1, 2026 and March 31, 2027. For the time being, this is a hard requirement — purchases outside this window will not be eligible for the enhanced rebate.

2. Construction Deadlines

The timeline for construction depends on the intended use of the property:

• Primary Residence: Construction must begin by December 31, 2028 and be substantially complete by December 31, 2031.

• Rental Property: Construction must be substantially complete by December 31, 2029.

  
  

3. Intended Use

The property must be intended for use as:

• Your primary place of residence (or that of a close relative), or

• A long-term residential rental property

Short-term rentals and investment properties not used for long-term residential purposes do not qualify.

The Critical Caveat

Here's what isn't making it into most of the headlines. As of early April 2026, neither component of this rebate is guaranteed legislation. The Ontario provincial portion — worth up to $80,000 — remains a policy announcement, not enacted law. The federal 5% GST relief is contingent on Bill C-26 passing Parliament. Until both clear their respective legislative hurdles, no buyer can rely on this relief with certainty on closing day.

This matters because the market is already pricing as if the rebate is a done deal. In fact, some builders are advertising sale prices that factor in rebates which are not yet legally available. A buyer who signs today, banking on $130,000 in tax relief, could face a serious shortfall at closing if the legislation stalls or their specific transaction doesn't qualify.

Adding another layer of complexity: the province is currently consulting on Bill 98 — the Building Homes and Improving Transportation Infrastructure Act — which proposes significant changes to municipal development approvals. Public consultation closes April 29 and May 14, depending on the specific regulation. How that legislation ultimately shapes the development pipeline could have downstream effects on new construction pricing and timelines.

The gap between market pricing and enacted law is the most important story in Ontario's real estate market right now. Don't let the headline number drive a decision before your lawyer has reviewed exactly how HST is treated in your agreement.

What This Means for Buyers

If the legislation passes as announced, this is one of the most significant affordability measures Ontario has introduced for new construction in recent memory. The potential savings are real — but so is the legislative risk between now and closing day.

If you're considering a new build or pre-construction purchase, the date on your agreement of purchase and sale is critical, and understanding how the rebate is reflected in the quoted price is just as important as the rebate itself. Talk to your real estate agent, your lender, and your real estate lawyer before you sign — and for the most accurate, up-to-date information, consult the official Ontario Government HST Relief page or a qualified real estate tax professional.

Questions? Let's Talk.

Navigating new construction purchases — including understanding rebates, contract terms, and builder negotiations — is something I help clients with regularly. If you're considering a new build or want to understand how this rebate might apply to a specific property you're looking at, I'd be happy to walk you through it.

This article is intended for informational purposes only and does not constitute tax or legal advice. Please consult a qualified tax professional or the CRA directly for guidance specific to your situation.