Ontario’s New HST Rebate: Up to $130,000 Back. But Here’s What No One Tells You.
The rules changed. The savings are real. But which money lands in your pocket — and which goes straight to the builder?
I recently helped a client — a first-time buyer purchasing a brand-new condo in Toronto for just over $1 million — navigate one of the most confusing parts of any new construction deal: the HST rebate.
There was a moment during the process where the question came up: “Do we qualify for the full $130,000 rebate?” And the honest answer was: it depends on which rebate you’re talking about.
Because here’s the thing — there isn’t just one HST rebate. There are multiple programs layered on top of each other. And the $130,000 headline number? That’s not an additional rebate on top of everything else. That’s the total combined maximum — the ceiling across all programs combined.
This blog is a plain-language breakdown of all of them, based on a real transaction and real legal advice from our deal lawyer. Let’s walk through it.
Why Does HST Even Apply to New Homes?
When you buy a resale home, there’s no HST on the purchase price. But when you buy a brand-new home — whether that’s a pre-construction condo, a newly built townhouse, or a completed new unit from a builder — HST applies to the full purchase price.
In Ontario, HST is 13%. On a $1,000,000 home, that’s $130,000 in tax. On a $1.1 million condo, you’re looking at $143,000.
That’s a lot of money. And the government knows it. Which is why several rebate programs exist to claw some of it back.
The HST Rebate Programs — Explained Simply
Think of the $130,000 as a bucket. The programs below are what fills that bucket. They work together — not as separate stacks of money on top of each other.
| Rebate Component | Max Amount | Who Claims It | Who Qualifies |
|---|---|---|---|
| Existing GST/HST New Housing Rebate | $24,000 (Ontario provincial portion) | Builder gets it | All buyers — baked into price |
| Federal FTHB Rebate (federal GST portion) | Full rebate up to $1M; reduced $1M–$1.5M | You claim — CRA | First-time buyers only |
| Ontario FTHB Rebate — provincial portion | Proposed — not yet law | You claim — CRA | First-time buyers only (pending legislation) |
| Ontario Expanded Rebate — Apr 2026 | $130,000 total cap (proposed) | You claim — CRA | ALL buyers — first-time or repeat (proposed) |
The $130,000 is the proposed total maximum rebate across all programs combined — not an extra rebate on top of others. The $24,000 existing rebate is already baked into your purchase price and goes to the builder. The Federal FTHB Rebate (active law) is a top-up you claim from CRA. The Ontario provincial components are still proposed — not yet law — and CRA will administer them once legislation passes.
Rebate #1: The One That Goes to the Builder ($24,000)
Every new construction agreement in Ontario factors in the existing provincial rebate. Here’s how it works in plain language:
The Ontario government provides a rebate of the provincial portion of HST for new home buyers. This rebate is capped at $24,000 for homes with a fair market value above $450,000. The builder assumes you qualify, reduces the purchase price by $24,000 upfront, and then reclaims that $24,000 from the government themselves.
So when your agreement says the price is $1,085,000 — that price has already been reduced by $24,000. It’s not “extra savings” you get at closing. It was priced in from the start.
If you don’t end up qualifying for the Existing Rebate (for example, if neither you nor a blood relative moves into the unit as a primary residence), the builder can charge you back the $24,000 and place a lien on the property until it’s paid. Your lawyer will make sure you understand this obligation before signing.
To qualify: you or a blood relative must occupy the unit as your primary residence from the occupancy date through closing.
Rebate #2: Federal First-Time Home Buyer Rebate
The federal government’s FTHB rebate eliminates the GST (the 5% federal portion of HST) for first-time home buyers on new homes valued up to $1,000,000. For homes priced between $1,000,000 and $1,500,000, a partial, reduced benefit applies. No benefit is available above $1.5M.
According to CRA, this rebate works as a top-up to the existing GST/HST new housing rebate — it builds on it, not a completely separate program. After closing, you apply directly with CRA and the money comes back to you.
This one does not go to the builder. It’s not netted into your purchase price.
- You must be a first-time home buyer
- Full rebate on homes up to $1,000,000 — reduced benefit on homes between $1,000,000 and $1,500,000
- Agreement must be entered into between March 20, 2025 and December 31, 2030
- Home must be your primary place of residence
Applications are open, but CRA is still updating its filing systems to process applications where the purchase agreement was signed between March 20, 2025 and May 26, 2025. If your agreement falls in that window, expect a processing delay.
Rebate #3: Ontario First-Time Home Buyer Rebate (Proposed)
Ontario also tabled a matching rebate for the provincial portion (8%) of HST for first-time buyers, announced alongside the 2026 Ontario Budget.
As of the date of this post, this rebate has not yet become law. CRA’s own website states it will begin administering this measure only once legislation is passed. Do not rely on it for closing calculations until your lawyer confirms its status. If enacted, it would provide significant additional savings on homes under $1.5M for qualifying first-time buyers.
The Game-Changer — Ontario’s Expanded HST Rebate (Proposed, April 2026)
On March 26, 2026, the Ontario government tabled the 2026 Ontario Budget, which proposed temporary relief from the 8% provincial part of the HST for new housing. As of the date of this post, CRA states this measure is still proposed and more details will be provided as they become available. That said, the intent and structure are clear — and this is the proposal that would make the full $130,000 total rebate possible.
If enacted: you would not need to be a first-time buyer to qualify for the maximum rebate. Repeat buyers would qualify too. The key requirement is that you — or an immediate family member — live in the property as the primary residence.
The $130,000 would be the total combined rebate cap — representing a full 13% HST rebate on homes valued up to $1 million. The individual programs (federal, provincial, existing) are the components that together reach that ceiling.
First-time buyer or repeat buyer — it doesn’t matter. You qualify if you or an immediate family member will occupy the unit as a primary residence. The agreement of purchase and sale must be signed between April 1, 2026 and March 31, 2027. Investors purchasing for long-term rental may also qualify.
How the Numbers Work by Price
| Purchase Price | Rebate Available | Notes |
|---|---|---|
| Up to $1,000,000 | Full 13% rebate (max $130,000) | Maximum savings |
| $1,000,000 – $1,500,000 | Flat $130,000 | Doesn’t offset full HST, but capped benefit maintained |
| $1,500,000 – $1,850,000 | Gradually reduces to $24,000 | Linear phase-out |
| Above $1,850,000 | $24,000 (existing rebate only) | Existing provincial rebate only |
The Key Conditions
- Agreement of purchase and sale signed between April 1, 2026 and March 31, 2027
- Construction must begin on or before December 31, 2028
- Home must be substantially completed by December 31, 2031
- Property must be used as primary place of residence (or long-term rental)
- Federal legislation must also pass for the full benefit to apply
As of May 2026, the legislation is progressing but final CRA forms and regulations had not yet been released. This is causing some confusion at the builder and purchaser level. Your lawyer will advise on how to handle the rebate amount at closing until the regulations are finalized.
Real Scenario: What a $1.1M Condo Buyer Could Actually Receive
The $24,000 was already credited at the time of purchase — it’s in the price. The remaining ~$106,000 flows back to the buyer through CRA after closing, as long as all eligibility conditions are met and the necessary applications are filed. These are not separate piles of money — together they make up the $130,000 total.
What This Means for Buyers Right Now
Whether you’re buying your first home or your third — if you’re purchasing a new build and you or your immediate family will live in it, you could qualify for the maximum rebate under the proposed Ontario expansion. The agreement window is narrow: April 1, 2026 to March 31, 2027.
The Federal FTHB Rebate is already active law. The Ontario provincial components are proposed and not yet law — CRA will begin administering them once legislation passes. Until then, talk to your lawyer about how your specific agreement handles the rebate exposure at closing.
The fine print matters enormously. Things like:
- Whether the rebate has been assigned to the builder in your agreement
- Whether the construction timeline qualifies
- Whether you meet the end-user requirements at both occupancy and closing
- Whether you’ve filed the right CRA applications post-closing
These are things you want locked down before you sign — not discovered during your 10-day cooling period.
In our transaction, the lawyer confirmed clearly: the $24,000 was assigned to the builder, the Federal FTHB Rebate and the Expanded Rebate were claimable by the buyer directly. The development levies were capped at $0 with a special amendment. The amendment to cap adjustments only applied to original purchasers — not if the deal were ever assigned. Every single detail mattered.
FAQs: Ontario New HST Rebate 2026
Does the HST rebate apply to resale homes?
No. HST rebates for buyers only apply to newly constructed homes purchased directly from a builder. Resale homes are not subject to HST on the purchase price.
Can investors claim the expanded rebate?
Potentially — if the property is purchased for long-term rental and the construction timelines are met. This is a significant expansion from previous programs that required owner-occupancy.
When do I actually receive the rebate money?
After closing, you or your accountant file the applicable CRA rebate applications. The money is returned by CRA — it doesn’t come at the closing table. Allow several weeks to months for processing.
What if the Ontario legislation doesn’t pass?
Both the Ontario Expanded Rebate and the Ontario FTHB provincial rebate are still proposed measures — CRA’s own website confirms it will administer them only once they become law. There is a risk the terms change or passage is delayed. Your lawyer will advise how your specific agreement handles this, including whether you may need to fund the rebate amount out of pocket at closing.
Do I need to be a first-time buyer to qualify?
No — and this is the biggest change with the April 2026 expansion. Repeat buyers qualify for the full $130,000 rebate too, as long as you or an immediate family member will occupy the property as a primary residence. First-time buyer status is no longer a requirement for the maximum rebate.
What counts as “first-time buyer” for these rebates?
You must not have owned a home, in Canada or anywhere in the world, that you or your spouse lived in during the current year or in any of the four preceding years. Both buyers on title must qualify if you want the full benefit.
This blog post is for informational purposes only and does not constitute legal or tax advice. HST rebate eligibility depends on your specific agreement, purchase price, construction timeline, and personal circumstances. Always consult your lawyer and tax advisor before making decisions based on rebate programs.
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Sales Representative · Zolo Realty Brokerage · Licensed in Ontario (RECO #5035461)
Toronto real estate agent specializing in first-time buyers and families across the GTA. 80+ five-star reviews · 100+ clients · $25M+ in completed transactions.