Ontario and the federal government have temporarily removed the biggest barrier to the HST new home rebate: the requirement that you move in. For one year, every buyer of a newly built home in Ontario — investor, second-home purchaser, or primary resident — can claim the combined federal-provincial rebate, potentially saving up to $30,000 at closing. Here is exactly what changed, who benefits, and how to claim it.
What Is the HST New Home Rebate?
New homes in Ontario are subject to the full 13% HST (5% federal GST + 8% Ontario provincial portion). The Canada Revenue Agency (CRA) administers a rebate that returns a portion of that tax to eligible buyers. The federal component rebates 36% of the GST paid on homes priced up to $350,000 (maximum federal rebate: $6,300), phasing out entirely at $450,000. Ontario's provincial rebate tops up to 75% of the provincial HST portion, capped at $24,000. Combined, buyers on a $500,000+ new build can recover close to the full $30,000 maximum.
What Changed — and Why It Matters
Previously, both the federal and Ontario rebates required the purchaser (or an immediate family member) to occupy the home as a primary place of residence. Investors, rental property buyers, and second-home purchasers were excluded entirely. The Ontario Ministry of Finance confirmed the one-year expansion removes that occupancy condition, aligning with the federal government's parallel move under the Excise Tax Act. The policy was designed to accelerate new housing starts at a time when Canada faces a severe supply shortfall — CMHC estimates Canada needs to build 3.5 million additional homes by 2030 to restore affordability.
Who Qualifies Under the Expanded Rules?
During the one-year window, you qualify if you purchase a brand-new home or substantially renovated home in Ontario directly from a builder. This now includes:
- Detached and semi-detached homes, townhouses, and condominiums
- Investment and rental purchase properties (previously excluded)
- Vacation or secondary residences
- Assignment sales of pre-construction units, where the original agreement falls within the eligible window
Resale homes remain ineligible — the rebate applies strictly to new construction. Buyers of new purpose-built rentals specifically benefit the most under this expansion, as they previously bore the full HST with no relief.
How Much Can You Actually Save?
Savings scale with purchase price. On a $700,000 new condo, the HST owing is approximately $91,000 before any rebate. With the full combined rebate of up to $30,000 applied at closing, the net HST burden drops to roughly $61,000. The Building Industry and Land Development Association (BILD) estimates this relief directly offsets a significant share of developer-levied closing costs, giving buyers stronger negotiating leverage on new builds. For investors, the rebate improves first-year cash flow and lowers the effective acquisition cost — materially changing cap rate calculations on purpose-built rental units.
- Home under $350,000: Maximum federal rebate of $6,300 + up to $24,000 Ontario rebate
- Home $350,000–$450,000: Federal portion phases out; Ontario portion still applies
- Home over $450,000: No federal rebate; Ontario rebate capped at $24,000
How Do You Claim the Rebate?
In most cases, the builder credits the rebate directly against your purchase price at closing — you assign your rebate entitlement to the builder, who handles the CRA Form GST190 filing on your behalf. If the builder does not apply it upfront, you file Form GST190 (federal) and the Ontario equivalent directly with the CRA after closing. The filing deadline is two years from the date of possession. Keep your Agreement of Purchase and Sale, closing statement, and proof of HST paid — all three are required.
Does the Rebate Apply to Pre-Construction Assignments?
Assignment sales sit in a grey zone. The Ontario Real Estate Association (OREA) recommends buyers on assignment deals confirm with a real estate lawyer that their specific agreement qualifies under the expanded rules. The critical date is typically the original purchase agreement date, not the assignment date — meaning some assignments signed before the policy announcement may still be eligible if possession falls within the window. Always get written confirmation from the builder and your lawyer before assuming the rebate applies.
How Long Does This Window Last?
The expanded eligibility runs for one year from the announcement date. The federal and provincial governments have not signalled a permanent extension, making this a time-sensitive opportunity. Builders and industry groups including CREA and BILD have lobbied for a permanent policy change, but for now buyers should treat the deadline as firm. Pre-construction units with occupancy dates beyond the window may not qualify — verify your closing timeline before signing.
What Does This Mean for the Ontario Housing Market?
The expansion is widely viewed as a demand-side stimulus targeted at new construction. CMHC and Statistics Canada data consistently show new housing starts lag population growth in Ontario. By making new builds more financially attractive to investors and second-home buyers, the policy incentivises developers to break ground on projects that were previously stalled. Whether the one-year window translates into a meaningful uptick in starts depends on whether buyers act decisively — and that window is already running.
Want to know exactly how much you could save on a specific new build — or whether a pre-construction deal you're considering qualifies? Working with an agent who understands the closing cost landscape can mean the difference between leaving $30,000 on the table or capturing it. Reach out today to get clarity on your numbers before the window closes.
