Ontario expands HST rebate relief for new homes

The Ontario government has announced a temporary, one year expansion of the HST rebate to support housing construction. Under this measure, buyers of qualifying new homes may effectively eliminate the 13% HST on purchase. 

Who this applies to 

The expanded rebate applies to newly constructed homes, condominiums, and qualifying rental properties where: 

• The Agreement of Purchase and Sale is signed between April 1, 2026 and March 31, 2027 

• Construction begins by December 31, 2028 

• The home is substantially completed by December 31, 2031 

• The property is intended to be used as a primary residence (for the purchaser or a close relative) or as a long term residential rental 

Key qualifying rules 

Only purchase agreements signed on or after April 1, 2026 are eligible for the rebate, as existing HST rules continue to apply to agreements signed before this date. For HST purposes, substantially renovated homes are treated as new housing where most of the existing structure has been removed or replaced. 
 
The rebate is not limited to first‑time homebuyers and is available to all individual purchasers. It applies only to newly constructed residential units, including houses, townhomes, and condominiums, while standard resale homes that have not been substantially renovated are not eligible. 
 
Maximum rebate by purchase price 

• Up to $1,000,000: Full 13% HST rebate, up to $130,000 

• $1,000,000 to $1,500,000: Rebate capped at $130,000 

• $1,500,000 to $1,850,000: Rebate reduced on a proportional basis, declining from $130,000 to $24,000 

• Above $1,850,000: Rebate limited to $24,000 (standard provincial rebate floor) 

Application at closing 

Government officials have confirmed that the rebate may be assigned to the builder on the Agreement of Purchase and Sale. This allows the builder to apply the rebate directly against the purchase price at closing, reducing immediate out of pocket costs. 

Usual tax filing deadlines have not changed. 

What this means for you 

If you are considering a new home purchase, a pre‑construction condo, or a qualifying rental project, timing and documentation play an important role. Agreement dates and construction milestones determine how the rebate applies, while purchase price and closing structure can affect cash flow. Baker Tilly professionals work with you to clarify these details and support informed, forward‑looking decisions.