Ontario’s new-home HST relief is now in effect, and the potential savings are significant. An eligible buyer purchasing a qualifying new or substantially renovated home may be able to recover the full 13% HST on a home valued up to $1 million, for combined relief of up to $130,000.
The headline number is real, but the final benefit depends on the agreement date, construction timing, intended use, purchase-price structure and other rebate rules. Builder pricing and incentives also matter. A rebate does not automatically make every new build a better deal than a comparable resale home.
How much could an eligible buyer save?
For a qualifying home valued at $1 million or less, the potential combined relief can equal the full 13% HST:
| Home value before HST | Potential combined relief |
|---|---|
| $400,000 | $52,000 |
| $600,000 | $78,000 |
| $800,000 | $104,000 |
| $1,000,000 | $130,000 |
Ontario’s temporary Enhanced New Housing Rebate can provide up to $80,000 for the provincial portion of the HST. Ontario’s New Home Affordability Payment can provide additional relief tied to the federal portion, up to $50,000. First-time buyers may also qualify through the federal and Ontario first-time home buyer rebate programs.
Which homes may qualify?
Eligible property types can include:
- New detached and semi-detached homes
- New townhomes and rowhouses
- New condominium units
- New duplexes and certain cooperative housing units
- Owner-built homes
- Homes that meet the tax definition of a substantial renovation
The home generally needs to be used as the buyer’s primary place of residence, or as the primary residence of a qualifying relation. Ordinary resale homes do not qualify simply because the buyer is purchasing for the first time.
The temporary Ontario dates matter
For a new home purchased from a builder under Ontario’s temporary enhanced program, the agreement of purchase and sale generally must be entered into between April 1, 2026 and March 31, 2027. Construction or substantial renovation generally must begin by December 31, 2028 and be substantially completed by December 31, 2031.
Owner-built homes have separate timing requirements. Construction or substantial renovation generally needs to begin between April 1, 2026 and March 31, 2027 and be substantially completed by December 31, 2029.
Assignment transactions have their own rules. In general, both the original agreement and the assignment agreement must fall within the qualifying period for the temporary Ontario enhancement.
First-time buyers have another route
The federal first-time home buyers’ GST/HST rebate can recover up to $50,000 of the federal portion for a qualifying new home valued at $1 million or less. The rebate is gradually reduced between $1 million and $1.5 million, and no federal first-time buyer rebate is available at $1.5 million or more.
Ontario’s first-time home buyers’ rebate can provide up to $80,000 of the provincial portion and follows the federal program’s eligibility conditions. The first-time buyer test generally looks at whether the buyer, or their spouse or common-law partner, lived in a home they owned during the current calendar year or the previous four calendar years.
Do not compare new builds using the rebate alone
This is the part buyers can easily miss. Some Ottawa builders have adjusted base prices, reduced incentives or changed lot premiums since rebate programs were announced. A large tax rebate can be partly offset by a higher purchase price or fewer builder incentives.
Before signing, compare:
- The previous and current base price
- Whether HST is included in the advertised price
- Whether the rebate is credited at closing or claimed later
- Lot and elevation premiums
- Design-centre allowances and upgrade costs
- Closing adjustments, development charges and legal costs
- Assignments, deposits and occupancy timelines
- The monthly carrying cost compared with a resale alternative
The right question is not simply, “How large is the rebate?” It is, “What is the true all-in cost of this home after every credit, premium, fee and incentive?”
How is the rebate claimed?
In some builder purchases, the builder may credit qualifying rebates directly to the buyer at closing. In other cases, the buyer may need to pay the HST and apply through the Canada Revenue Agency. The correct process depends on the transaction and when the tax became payable.
Buyers should confirm the treatment of HST and all rebate assignments in the builder’s agreement with their real estate lawyer and accountant before making a firm commitment.
Considering a new build in Ottawa?
I can help you compare builder pricing, incentives, timelines and resale alternatives before you walk into a sales centre or sign an agreement. Contact Ryan Holmes at 613-801-6279 or send me a message.
This article is general information and is not tax or legal advice. Eligibility and rebate calculations depend on the facts of each transaction. Confirm your position with the Canada Revenue Agency, your lawyer and your accountant.