- with Senior Company Executives, HR and Finance and Tax Executives
- with readers working within the Accounting & Consultancy and Property industries
Builders can now credit the Ontario Enhanced New Housing Rebate (the “Enhanced NH Rebate”) to eligible purchasers on closing, which includes both the 8% provincial portion of the HST (“PVAT”) and the 5% Ontario New Home Affordability Payment top-up (“ONHAP”). The federal and provincial regulations are in force, and the Canada Revenue Agency has updated Form GST190, GST/HST New Housing Rebate Application for Houses Purchased from a Builder to reflect the Enhanced NH Rebate.
The Enhanced NH Rebate applies to agreements of purchase and sale entered into between April 1, 2026, and March 31, 2027. For background on the underlying measures, see What builders should know: Update on GST/HST rebates for residential home sales.
This update covers the practical mechanics: how the credit works on closing, how builders report and recover each portion of the rebate, and the cash flow gap builders should expect between remitting the 5% GST to the CRA and receiving the ONHAP payment from Ontario.
For the purposes of this update, we assume that only the Enhanced NH Rebate applies to the purchase. The interaction with the existing New Housing Rebate and the First-Time Home Buyers’ Rebate is beyond the scope of this update.
Builders can now credit the Enhanced NH Rebate on closing
As anticipated, builders can choose to credit the Enhanced NH Rebate to eligible purchasers on closing.
The rebate for the 8% PVAT is implemented through amendments to the regulations under the Excise Tax Act (Canada). The additional 5% ONHAP amount is implemented through Ontario legislation and regulations under the Retail Sales Tax Act (Ontario).
Yes, you read that correctly. The 8% provincial portion of the HST is implemented through federal regulations, while the 5% Ontario top-up / ONHAP is implemented through Ontario regulations.
Updated forms are available
The updated CRA Form GST190 includes consents by both the purchaser and the builder for the sharing of relevant contact, banking, and rebate information with the Province of Ontario. A separate application form is not required for a purchaser to claim the 5% Ontario top-up / ONHAP.
Builder reporting and recovery of the rebate
Builders that credit the Enhanced NH Rebate to purchasers must still report the full HST collectible on the sale of the home on their GST/HST return.
The 8% PVAT portion of the credited rebate can be deducted from the builder’s net tax. The rebate application form submitted by the purchaser should be submitted at the same time as the builder’s GST/HST return for the reporting period in which the deduction is claimed to help avoid processing delays.
The ONHAP, being the 5% Ontario top-up portion of the credited rebate, cannot be deducted on the builder’s GST/HST return and still needs to be remitted to the CRA. Instead, builders will recover that amount separately from the Government of Ontario after the rebate application is assessed, including verification of the purchaser’s eligibility for the rebate.
To be clear, this does not mean that the ONHAP cannot be assigned to the builder. However, there may be several months between the time the 5% GST needs to be remitted to the CRA and when the builder receives the assigned payment from the Government of Ontario.
Key takeaways for builders
- Builders can credit both the 8% PVAT and the 5% ONHAP portions of the Enhanced NH Rebate to eligible purchasers on closing for agreements entered into between April 1, 2026, and March 31, 2027.
- The updated CRA Form GST190 covers both portions, no separate Ontario application is required.
- There is a split recovery mechanism – the 8% PVAT is deducted on the GST/HST return while the 5% ONHAP is reimbursed separately by Ontario, creating a cash flow gap that needs to be factored into project financing.
Questions about the Enhanced NH Rebate?
If you have questions about how the Enhanced NH Rebate applies to your projects and transactions, contact one of Miller Thomson’s Sales, Commodity and Indirect Tax lawyers or Real Estate lawyers. Our teams work closely together to provide practical, coordinated advice on GST/HST and real estate matters.
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.
[View Source]
