Ontario HST Rebate for Home Buyers: How It Works, Who Qualifies, and How to Save Thousands

Buying a new home in Ontario can come with a major tax break, but only if you understand how the HST rebate rules actually work. Here is what applies, what does not, and how buyers can avoid expensive surprises.

Many Ontario buyers hear the phrase “HST rebate” and assume it applies to any home purchase. That is one of the biggest misunderstandings in real estate. In most cases, the rebate discussion is about new homes, substantially renovated homes, owner-built homes, or certain co-op purchases. A typical resale home is usually not subject to HST on the purchase price in the first place, so there is usually no new housing rebate to claim on that resale purchase.

That distinction matters because the numbers can be big. Ontario’s long-standing provincial new housing rebate can be worth up to $24,000, and the federal side can add more depending on the situation. For first-time buyers of eligible new homes, the newer federal first-time home buyers’ GST/HST rebate can push the savings much higher than many buyers realize.

If you are buying a brand-new condo, pre-construction townhome, new detached home, substantially renovated property, or building your own home, this is one of the most important tax rules to understand before you close. It can affect your cash needed at closing, your builder paperwork, and even whether the price you were quoted is truly the price you will pay.

What is the Ontario HST rebate?

In Ontario, HST is 13%, made up of a 5% federal part and an 8% provincial part. The long-standing Ontario new housing rebate is designed to refund 75% of the provincial part of the HST, up to a maximum of $24,000. In practical terms, that means the provincial rebate is very valuable on new homes and often hits the cap on higher-priced new construction.

There is also the older federal new housing rebate, which generally refunds 36% of the federal part of the HST, up to a maximum of $6,300. But that older federal rebate phases out as the purchase price or fair market value rises above $350,000 and disappears at $450,000. That is why many Ontario buyers of modern new construction do not get much, or any, benefit from the older federal rebate even though they may still get the Ontario rebate.

On top of that, there is now a newer first-time home buyers’ GST/HST rebate at the federal level. CRA says this rebate can eliminate the federal GST or federal part of the HST on a qualifying first home valued up to $1 million, and it phases down for homes between $1 million and $1.5 million, to a maximum federal rebate of $50,000. CRA also states that this first-time buyer rebate acts as a top-up to the existing federal new housing rebate where both apply.

The most important thing buyers get wrong

The HST rebate is mainly a new-home issue, not a standard resale-home issue. CRA guidance says sales of used owner-occupied homes are usually exempt from GST/HST, and only homes sold by builders are generally taxable in the way that triggers these new-housing rebate rules. That means if you are buying a normal resale detached home, resale condo, or resale townhouse in Ontario, the “HST rebate” usually is not the right savings conversation.

So when does it matter? Usually when you are buying from a builder, buying certain substantially renovated housing, purchasing a qualifying co-op share, buying a home on leased land in a qualifying structure, or building the home yourself.

Who does the Ontario HST rebate apply to?

At a high level, the rebate is for individuals, not corporations or partnerships. CRA states that if there is more than one owner, all owners must be individuals, and corporations and partnerships are not entitled to claim the new housing rebate.

The home must generally be intended as the primary place of residence for you or a qualifying relation, and the CRA form for homes purchased from a builder states the home is not intended as a rental property. For the standard new housing rebate rules, the home can be for you or your relation; for the first-time buyer federal top-up, the home must be for the first-time buyer’s primary place of residence.

For builder purchases where you buy the house and land together, the older federal rebate usually requires the total pre-tax purchase price to be under $450,000. Ontario’s provincial rebate is more flexible: CRA says that in Ontario, the provincial rebate may still be available even if you do not qualify for the federal rebate only because the home exceeds the federal $450,000 threshold, as long as the other conditions are met. That is one reason the Ontario rebate remains relevant for many buyers even when the older federal rebate is gone.

If you are buying a home on leased land from a builder, the rules are different. CRA uses fair market value thresholds instead of a simple purchase-price test for the federal portion, but the Ontario rebate can still apply, again up to $24,000.

How the first-time buyer federal rebate works now

For the newer federal first-time buyer rebate, CRA says you must generally not have lived in a home you or your spouse/common-law partner owned in the current calendar year or the previous four calendar years, measured at the relevant date. For a builder purchase, CRA says you must meet the first-time buyer test on the date ownership is transferred to you. CRA also says neither you nor your spouse/common-law partner can have previously received this specific first-time buyer GST/HST rebate.

CRA further says this federal first-time buyer rebate can apply where the purchase agreement with the builder was entered into on or after March 20, 2025 and before 2031, and where construction is substantially completed before 2036, assuming the other conditions are met.

Why this matters financially

This rebate is not a tiny credit. It can change what you need at closing by thousands, and in some cases by tens of thousands of dollars. It also matters because many builder prices are presented as stated price net of rebates. CRA has a specific info sheet on this exact issue and explains that some builder pricing is quoted with the HST included and the housing rebates already credited by the builder. If a buyer does not actually qualify for the rebate that was assumed in the pricing, the real out-of-pocket closing number can be higher than expected.

That is why buyers should never rely on marketing language alone. A price sheet, worksheet, or APS that looks attractive may already assume one or more rebates are being credited. The buyer should confirm which rebate is being assumed, who is applying for it, and whether the builder is crediting it at closing or leaving the buyer to file later.

Examples buyers can actually understand

Example 1: Non-first-time buyer purchasing a new Ontario home for $700,000

On a $700,000 new home in Ontario, the older federal rebate is generally gone because the federal threshold disappears at $450,000. But the Ontario rebate can still be available up to its maximum of $24,000. CRA’s Ontario pricing guidance even shows a high-price example where the federal rebate is zero while the Ontario rebate still hits the $24,000 maximum.

Example 2: First-time buyer purchasing a new Ontario home for $700,000

For a qualifying first-time buyer, the newer federal first-time buyer rebate can eliminate the federal portion of HST on a new home priced at $1 million or less, up to $50,000. On a $700,000 home in Ontario, the federal 5% portion is $35,000, so the federal first-time buyer rebate could cover that full federal amount if all eligibility conditions are met. Add the Ontario provincial rebate of up to $24,000, and the combined savings can be about $59,000.

Example 3: First-time buyer purchasing a new Ontario home for $1.25 million

CRA says the new first-time buyer federal rebate phases down between $1 million and $1.5 million. CRA’s own example says a $1.25 million home is the midpoint and qualifies for 50% of the maximum $50,000, which is $25,000 federally. If the buyer also qualifies for the Ontario rebate, that can add up to $24,000 more, for potential combined relief of about $49,000.

How buyers claim the rebate

If you are buying from a builder, the cleanest version is often when the builder credits the rebate at closing. CRA says builders can credit the first-time buyer rebate in the same manner as the existing new housing rebate, reducing the amount payable for the home. CRA also explains that if the builder credits the rebate, the builder submits the application paperwork.

If the builder does not pay or credit the rebate, the buyer must usually apply directly. CRA says buyers generally have up to two years from the date ownership was transferred to claim the rebate on a builder purchase, and the required forms can include GST190 plus the Ontario schedule RC7190-ON where applicable.

If you built the home yourself or substantially renovated it, the filing path is different. CRA uses GST191 for owner-built homes, and the filing deadline depends on the relevant “base date.” CRA also says to keep supporting records, including invoices and occupancy proof, for six years.

Common mistakes that cost buyers money

The first mistake is assuming a resale purchase qualifies. Usually it does not, because standard resale owner-occupied homes are usually exempt from GST/HST on sale.

The second is assuming that “first-time buyer” simply means “I have never bought anything before.” CRA’s test looks at whether you, or your spouse/common-law partner, lived in a home you owned in the current year or the previous four calendar years.

The third is assuming the buyer rebate applies to a property being bought mainly as a rental. CRA’s new housing rebate is for a primary residence. For long-term rental properties, there is a separate new residential rental property rebate regime instead.

The fourth is ignoring assignment-sale complications. CRA says the price paid for a taxable assignment can count toward the threshold for builder-purchased homes, and CRA guidance also notes that only one new housing rebate application can be made for each new house, which can complicate assignment situations.

The fifth is not checking whether the builder’s advertised or worksheet price is net of rebates. If the price assumed a rebate you do not actually qualify for, your closing costs may be higher than you expected.

Important 2026 Ontario update

Ontario announced in its 2026 Budget that it is proposing a temporary enhancement to the provincial HST new housing rebate. The budget says this proposal would temporarily remove the full 8% provincial portion of HST for eligible buyers of new homes valued up to $1 million, with up to $80,000 of provincial savings, and maintain that maximum for new homes between $1 million and $1.5 million. But the key word is proposing. As of now, buyers should treat the long-standing rebate rules as the current baseline and watch for final implementation details before relying on the broader proposed Ontario relief in a deal.

Bottom line

If you are buying a new home in Ontario, the HST rebate can be a major part of your real numbers. For many buyers, especially first-time buyers purchasing eligible new construction, the savings can be substantial. But the rules are technical, the paperwork matters, and the rebate assumptions built into builder pricing can create surprises if no one checks them carefully.

If you are planning to buy, sell, or buy and sell in Ontario, MatchWithAgent.ca can help you connect with a real estate agent who fits your goals and understands the practical side of new construction, resale, timing, and closing costs. A smart agent cannot replace your accountant or lawyer, but the right one can help you avoid mistakes before they become expensive.

This article is for general information only and is not legal, accounting, or tax advice. For rebate eligibility on a specific transaction, confirm the details with your real estate lawyer, accountant, builder, or directly with the CRA. 

FAQ

Does HST apply to resale homes in Ontario?

Usually, no. CRA says sales of used owner-occupied homes are usually exempt from GST/HST, which is why the new housing rebate discussion is mainly about new construction, substantial renovations, and certain special cases.

How much is the Ontario HST rebate on a new home?

The long-standing Ontario new housing rebate generally refunds 75% of the provincial 8% part of HST, up to a maximum of $24,000.

Can I get the Ontario HST rebate if I am not a first-time buyer?

Yes, potentially. The Ontario rebate is not limited only to first-time buyers. The newer federal first-time buyer rebate is separate.

Do investors get the same rebate?

Usually not for a property being bought as a rental. CRA’s standard new housing rebate is for a primary residence. A separate rental-property rebate regime may apply in some cases.

What form is used for a builder purchase?

For a home purchased from a builder, CRA uses Form GST190, and Ontario claims can also require RC7190-ON. If the builder credits the rebate, the builder usually submits the paperwork.

Is Ontario’s bigger 2026 HST relief already in force?

Ontario announced it as a proposal in the 2026 Budget. Buyers should not assume the expanded provincial relief is available on a transaction until final implementation details are confirmed.

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