Ontario and the federal government have temporarily expanded HST relief on newly built homes, offering eligible buyers a rebate of up to $130,000. The program runs for one year and applies to purchase agreements signed between April 1, 2026 and March 31, 2027, covering the full 13 per cent HST on qualifying new homes priced up to $1 million.
The rebate is structured in tiers based on the purchase price in the agreement of purchase and sale. For new homes valued at up to $1 million, the full 13 per cent HST is effectively rebated, which works out to a maximum of $130,000. Homes priced between $1 million and $1.5 million still qualify for the flat $130,000 maximum. Above $1.5 million, the rebate declines proportionally down to $24,000 at roughly $1.85 million. Beyond that threshold, only the pre-existing provincial rebate of up to $24,000 applies.
Unlike the earlier federal First-Time Home Buyers' GST Rebate introduced through Bill C-4, the one-year Ontario expansion is open to all buyers, not just first-time purchasers. Investors purchasing new-build properties for long-term residential rental use also qualify, provided the other conditions are met.
Timing matters significantly. The agreement of purchase and sale must be signed during the April 2026 to March 2027 window. For primary residence purchases, construction must begin on or before December 31, 2028, and the home must be substantially completed by December 31, 2031. Rental properties have slightly different deadlines. Resale homes do not qualify because HST does not apply to resale transactions.
Ontario is covering the full 13 per cent upfront through a cost-sharing arrangement with the federal government. The provincial portion of 8 per cent has been formally committed, while the federal 5 per cent component still requires passage of amendments to the Excise Tax Act. Eligible housing types include detached and semi-detached homes, condominiums, townhouses, and rowhouses purchased from a builder or constructed on land the buyer owns.
In most cases, the rebate is applied as a credit at closing rather than issued as a separate cheque. Many builders incorporate the anticipated rebate into the advertised price, so buyers should review their purchase agreement carefully to understand how it is structured and whether they or the builder receive the credit directly. For a full breakdown of what to expect financially on closing day, see closing costs when buying a home in Toronto.
