Ontario changed the rules this year. There is more money on the table than most buyers realise, a deadline almost nobody is watching, and one gap that can turn into a five-figure surprise on closing day.
When you buy a resale home in Ontario, there is no HST on the purchase price. When you buy a new home from a builder, there is — 13% of it — and most of the time you never see it, because the builder quotes you a price with the rebate already baked in and assigns the rebate to themselves.
That arrangement works quietly and well, right up until the moment it does not apply to you. And in 2026 the number of people it does not apply to has grown, because Ontario has layered two temporary programs on top of the permanent ones.
"The builder said the HST was included. Why is there $40,000 on my statement of adjustments?"
Almost always, the answer is the same: the buyer told the builder they were moving in, and then decided to rent it out. The moment that changes, the rebate the builder credited at closing stops being yours to claim — and the builder wants it back.
People talk about "the HST rebate" as if it is one thing. It is not. On a new Ontario home there are two permanent rebates and, as of this year, two temporary ones — and which of them you can touch depends almost entirely on whether you are going to live in the place.
36% of the 5% federal portion, to a maximum of $6,300. It is paid in full only where fair market value is $350,000 or under, tapers between $350,000 and $450,000, and disappears entirely at $450,000. In this region, that means it is effectively dead for most purchases.
75% of the 8% provincial portion, to a maximum of $24,000. This one matters far more here, because unlike the federal rebate it is available regardless of the fair market value of the home. A $1.4 million new build gets the same $24,000 cap as a $600,000 one.
This is the one that changes the arithmetic for a first-time buyer. It rebates 100% of the GST, up to $50,000, on a new home valued up to $1 million, then slides down to nothing between $1 million and $1.5 million. CRA's own worked example: a $1.25 million home sits at the midpoint, so it earns half the maximum — $25,000.
It applies where the agreement of purchase and sale is entered into on or after 27 May 2025 and before 2031, construction begins before 2031, and the home is substantially complete before 2036.
This is the largest and the least discussed, and it is the reason this article is timed the way it is. It lifts the combined provincial relief from $24,000 to as much as $80,000.
The Ontario Enhanced New Housing Rebate is temporary, and it is keyed to the date you sign — not the date you close. To qualify on a purchase from a builder, the agreement of purchase and sale has to be entered into on or after 1 April 2026 and on or before 31 March 2027.
That is the whole eligibility test on timing. A pre-construction unit signed in February 2027 and delivered in 2029 is inside the window. The identical unit signed in April 2027 is outside it.
| Value of the home | Enhanced provincial relief |
|---|---|
| Up to $1,000,000 | 100% of the 8% provincial part, to a maximum of $80,000 |
| $1,000,000 – $1,500,000 | A flat $80,000 |
| Over $1,500,000, under $1,850,000 | A partial rebate of the provincial part |
| $1,850,000 and above | No enhanced rebate — the ordinary Ontario rebate of up to $24,000 only |
For a first-time buyer purchasing a new $950,000 home inside that window, the enhanced provincial rebate and the federal first-time buyers' rebate are separate programs addressing separate halves of the HST. That is a materially different purchase from the same home bought in 2024, and it is worth having your lawyer confirm both before you firm up.
Every rebate described so far carries the same condition: the home has to be bought as a primary place of residence, for you or a close relation. CRA is explicit that the first-time buyers' rebate cannot be claimed on an investment or rental property, and the new housing rebate rules say the same.
Buy a new build to rent out and you are in a different program entirely — the New Residential Rental Property (NRRP) rebate — which works in a way that catches people out three times over.
This is the cash-flow shock. With an owner-occupied purchase the builder credits the rebate against your price at closing and claims it back themselves — you never fund it. As a landlord you pay the HST to the builder on closing day and then apply to CRA yourself afterwards. The money comes back, but not on the day you need it, and a buyer who budgeted as though the rebate were credited is short a five-figure sum at the worst possible moment.
The NRRP rebate requires the unit to be leased for continuous occupancy of at least one year by an individual using it as a primary place of residence. A short-term rental arrangement does not satisfy it. You have two years from the end of the month in which the tax became payable to file.
Here is the part that is genuinely unresolved as we publish this, and the reason we would not let an investor client sign this month without raising it. CRA's notice on the Ontario Enhanced New Housing Rebate deals with owner-occupied homes. On the rental side it says only that "a new notice with information about the Ontario enhanced new residential rental property rebate is expected to be available by October 2026."
So an investor signing a pre-construction agreement right now is signing into a window whose rental-side rules have not been published. That is not a reason to walk away. It is a very good reason to have your lawyer and accountant look at the timing, and to watch for that notice before you firm up if your closing allows it.
The single most costly error we see is not a misunderstanding of the numbers. It is a change of plan.
Someone signs a pre-construction agreement intending to move in. The builder credits the new housing rebate against the price. Three years pass, the unit is finally ready, life has moved on — and they decide to rent it out instead. The rebate was granted on the basis of a primary residence that never happened, and CRA can reassess and recover it, with interest.
The fix is almost always available if you see it coming. Declaring the change before closing means paying the HST at closing and claiming the NRRP rebate on the correct basis instead. Discovering it two years later, in a reassessment letter, is a much worse conversation. If your intentions have changed between signing and closing — and on a pre-construction timeline that is common, not unusual — tell your lawyer before the keys change hands.
There is a related trap on the rental side: sell within a year of claiming the NRRP rebate, to a buyer who is not moving in themselves, and CRA can recapture it.
None of this makes a new build a worse purchase than a resale home. It makes it a purchase with a tax layer that a resale home does not have, and one where the difference between reading the agreement and skimming it can be $80,000.
No. HST applies to new and substantially renovated homes bought from a builder, not to an ordinary resale purchase. You will still pay HST on services connected to the deal — your REALTOR®'s commission, legal fees, inspections — but not on the purchase price itself.
It provides combined relief of up to $80,000 of the 8% provincial part of the HST. A home up to $1 million gets 100% of that provincial portion to the $80,000 maximum; between $1 million and $1.5 million it is a flat $80,000; above $1.5 million and under $1.85 million it is partial; and at $1.85 million or more only the ordinary Ontario rebate of up to $24,000 applies. To qualify on a builder purchase, the agreement of purchase and sale must be entered into on or after 1 April 2026 and on or before 31 March 2027.
No. CRA restricts it to a home bought as your primary place of residence — it cannot be claimed on an investment or rental purchase. It rebates 100% of the GST up to $50,000 on a new home valued up to $1 million, sliding to nothing between $1 million and $1.5 million, where the agreement is entered into on or after 27 May 2025 and before 2031.
CRA can reassess and recover the rebate with interest, because it was granted on the basis of a primary residence that did not happen. If your plans change between signing and closing — common on a pre-construction timeline — tell your lawyer before closing. Declaring it means paying the HST at closing and claiming the New Residential Rental Property rebate on the correct basis instead.
No, and this is the most common budgeting mistake on pre-construction investment purchases. An owner-occupier typically has the rebate credited against the price by the builder and never funds it. A landlord pays the HST to the builder on closing day and applies to CRA for the NRRP rebate afterwards, so you need the full amount available on closing rather than the net figure.
For the New Residential Rental Property rebate you generally have two years from the end of the month in which the tax became payable, and the unit must be leased for continuous occupancy of at least one year to an individual using it as a primary place of residence. Selling within a year to a buyer who is not moving in themselves can trigger recapture of the rebate.
As of September 2026 that is genuinely unsettled. CRA's notice on the Ontario Enhanced New Housing Rebate covers owner-occupied homes, and states that a separate notice on an enhanced rebate for new residential rental property is expected by October 2026. If you are buying to rent inside the eligibility window, this is worth raising with your lawyer and accountant before you firm up.
Every figure above is taken from the Canada Revenue Agency's own published material rather than summarised from elsewhere. If you are making a decision on this, read the source:
Current as of September 2026. Rebate programs change, and the rental-side rules for the enhanced Ontario rebate had not been published when this was written.
We will walk through the agreement with you before you sign it — what the builder has assumed about how you will use the home, what that means for the rebate, and what actually needs to be in your budget on closing day. No pressure, and no obligation.
Laura Brown & Kristina Kritikos · Royal LePage Burloak Real Estate Services · 905-634-7755