An Updated Overview Of Ontario's New Housing Rebates

Ontario’s HST rebate landscape for new housing has always required careful navigation. As of 2026, it has become even more complex. What was once a relatively straightforward, two-part rebate has evolved into a multi-layered framework of overlapping programs, some already in force and others still working their way through the legislative process.

The starting point: The existing GST/HST new housing rebate

At the foundation is the long-standing GST/HST New Housing Rebate, administered by the Canada Revenue Agency.

This program provides a partial recovery of the HST paid on a newly constructed or substantially renovated home. It applies broadly to most purchasers, provided the home is intended to be used as a primary residence.

In practical terms, the rebate consists of two components:

• A federal portion (5% GST), capped at approximately $6,000
• An Ontario portion (8% provincial component of HST), capped at $24,000

In many transactions, this rebate is assigned to the builder, who credits it to the purchaser on closing. Despite all the recent announcements, this remains the default rebate regime and continues to apply across the province.

A major shift: The federal first-time buyer GST rebate

The most significant change currently in force is the federal government’s enhanced rebate for first-time buyers.

This program dramatically increases the federal component of the rebate, allowing eligible purchasers to recover up to 100% of the 5% GST, with a maximum benefit of $50,000.

To qualify, a purchaser must meet the Federal first-time buyer criteria—generally meaning they have not owned and occupied a home in the preceding four years—and must intend to use the property as their primary residence.

The rebate applies in full to homes priced up to $1 million and is phased out for homes priced between $1 million and $1.5 million.

The enhanced rebate is only available for first-time buyers who entered into Agreements of Purchase and Sale on or after March 20, 2025, and before 2031. If an Agreement of Purchase and Sale was entered into before March 20, 2025, and then cancelled, with a new Agreement of Purchase and Sale entered into between that buyer and the same builder on or after March 20, 2025, the buyer will not qualify even though the new Agreement was entered into on or after March 20, 2025.

Importantly, this program is already in force. For first-time buyers acquiring new construction, it represents a meaningful and immediate reduction in closing costs.

The next step: Ontario’s proposed first-time buyer rebate

Ontario has signalled its intention to go further by introducing a matching provincial program aimed at first-time buyers.

If implemented, this proposal would rebate up to 100% of the provincial portion of the HST—that is, the 8% Ontario component—potentially delivering an additional $80,000 in savings.

When combined with the federal program, the total relief could reach approximately $130,000. At that level, the HST burden on qualifying new homes would be largely eliminated for first-time buyers within the applicable price thresholds.

However, as of April 7, 2026, this Ontario rebate is not yet in force. It remains a policy announcement that will require legislative implementation and administrative rollout before it becomes available. Ontario, however, is taking steps to align the effective date of the provincial rebate for first-time home buyers with the federal government’s new earlier effective date of March 20, 2025. Once this rebate is fully approved, this change would extend the rebate to purchasers who entered into Agreements of Purchase and Sale on or after March 20, 2025, and before 2031. 

A new development: Ontario’s proposed rebate for all purchasers

The most recent Ontario budget introduced yet another layer: a proposed broad-based HST rebate for all purchasers of newly built homes, not limited to first-time buyers.

This marks a notable shift in policy. Rather than targeting only entry-level buyers, the province is now signalling an intent to stimulate housing supply across the entire market—supporting move-up buyers, downsizers, and potentially other categories of purchasers.

While full details have not yet been released, the program is expected to:

• Apply to newly constructed homes (not resales)
• Provide enhanced relief on the Ontario (8%) portion of HST
• Include price thresholds similar to the federal framework
• Likely impose occupancy or use requirements

Ontario is working with the federal government to partner and match the province’s commitment to temporarily rebate the HST on all eligible new homes. Together, this could provide up to $130,000 in combined federal and provincial HST relief on new homes valued at $1 million and up to $1.5 million, to help build more homes, create jobs, and improve affordability for families. The enhanced rebates will only be available when an Agreement of Purchase and Sale is entered into from April 1, 2026, to March 31, 2027. 

As of April 7, 2026, however, this program—like the enhanced Ontario first-time buyer rebate—remains proposed and not yet fully approved.

Where things stand today

For all the policy activity, the number of rebates that can actually be relied upon in a transaction is still limited.

Available as of April 7, 2026:

• The existing GST/HST new housing rebate (all qualifying buyers)
• The enhanced federal GST rebate for first-time buyers

Not yet fully approved:

• Ontario’s proposed full rebate for first-time buyers
• Ontario’s proposed broader rebate for all purchasers
• The federal broader rebate for all purchasers

Some builders may decide to offer one or more of these rebates on closing and may already be advertising sale prices, factoring in rebates that are not yet fully approved. This can be risky to both builder and buyer – if a rebate is not approved, or the buyer fails to qualify for a rebate (including if qualifications change), the buyer may have to come up with an additional $130,000 or more on closing to make up for a rebate that, although factored into the original sale price, is not actually available on closing.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.