Ontario HST Rebate for New Homes (2026): What Buyers Need to know

Since July 1, 2010, the cost of buying a newly built home in Ontario has included 13% Harmonized Sales Tax (HST).

However, major policy changes introduced in 2025–2026 are reshaping affordability—especially for first-time buyers.

With a mix of existing rebates and newly proposed enhancements, buyers could now save tens of thousands of dollars on new construction homes.

This article breaks down how the Ontario HST rebate works, what’s new, and how much you could save.

Understanding HST on New Homes in Ontario

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

• 5% federal portion (GST)
• 8% provincial portion (Ontario HST)

Unlike resale homes (which are HST-exempt), buyers of new builds must factor this tax into their purchase price—though rebates can significantly reduce the actual cost.

The Existing Ontario New Housing Rebate

Before the new changes, Ontario already offered a provincial HST rebate to help offset costs.

Key features include:

• Covers 75% of the provincial portion (8%) of HST
• Maximum rebate: $24,000
• Available regardless of home price (no upper price cap)

This rebate effectively reduces—but does not eliminate—the provincial HST burden.

For example:

On an $800,000 new home, the provincial portion of HST is $64,000. The rebate would return up to $24,000, leaving a significant gap still paid by the buyer.

The New 2026 HST Rebate Changes

The biggest shift comes from new federal and provincial initiatives aimed at first-time home buyers.

Federal GST Rebate Expansion

The federal government introduced a new rebate allowing:

• Up to 100% of the 5% GST refunded
• Maximum rebate of $50,000
• Applies to homes priced:
• Up to $1 million (full rebate)
• $1M–$1.5M (phased out)
• Above $1.5M (no rebate)

This alone can significantly reduce closing costs on new homes.

Ontario’s New Full Provincial HST Rebate

As part of the 2026 Budget, Ontario is removing the full 13% Harmonized Sales Tax (HST) on new homes valued up to $1.5 million for one year (April 1, 2026, to March 31, 2027)

This initiative, in partnership with the federal government, offers a maximum rebate of $130,000 for all buyers, not just first-time buyers.

Eligibility & Duration: The initiative runs for one year, from April 1, 2026, to March 31, 2027, applying to new homes bought as a primary residence or rental property.

Rebate Structure:

o   Up to $1.5 Million: The full 13% HST is removed (8% provincial, 5% federal), providing a maximum rebate of $130,000.

o   Above $1.5 Million: The maximum rebate of $130,000 decreases proportionally, reaching a minimum of $24,000 for homes valued at or above $1.85 million.

Goal: The policy aims to boost housing supply and affordability, providing roughly $2.2 billion in total joint tax relief with the federal government.

Construction Timelines: For new homes purchased as a primary residence, construction must begin on or before Dec. 31, 2028, and be completed by Dec. 31, 2031. Rental properties have a construction completion deadline of Dec. 31, 2029.

This is a major shift from the current capped $24,000 rebate.

Potential Total Savings

When combining both federal and provincial changes:

• Federal rebate: up to $50,000
• Ontario rebate: up to full 8% provincial HST

Total potential savings can exceed $100,000+, depending on purchase price.

In some cases, estimates suggest total tax savings could reach $130,000 on a $1M + home

Who Qualifies?

To benefit from these rebates, buyers generally must:

• Be first-time home buyers
• Be 18 years or older
• Be a Canadian citizen or permanent resident
• Intend to use the home as a primary residence
• Not have owned a home in the past 4–5 years 

These conditions align closely with existing rebate programs and are designed to target end-users rather than investors.

How the Rebate Is Applied

In most cases, buyers don’t need to wait for a refund.

• Builders often credit the rebate upfront
• The purchase price is shown as “net of HST rebate”
• Buyers assign the rebate to the builder during closing 

This means lower upfront costs and a smaller mortgage amount.

Why This Matters for the Ontario Housing Market

These rebate changes are more than just tax relief—they’re a policy tool aimed at:

• Boosting new home sales
• Encouraging first-time buyer entry
• Stimulating housing construction activity

Ontario has faced declining pre-construction sales and affordability challenges.

By reducing the tax burden, the government is trying to revive demand and increase housing supply.

Final Thoughts

The new Ontario HST rebate framework represents one of the most significant affordability measures in recent years.

It could dramatically lower the cost of entering the housing market—especially for first-time buyers purchasing new construction.

If you’re considering a pre-construction or new build purchase in 2026, understanding these rebates could make a six-figure difference in your total cost.