HST on New Homes & Rebate Guide 2026
Everything Ontario home buyers and builders need to know about the HST new home rebate in 2026 — the enhanced Ontario NHR (up to $130,000 combined), the federal First-Time Home Buyers' rebate, self-supply rules, builder assignment, worked dollar examples and CRA forms. Written by a licensed Ontario CPA.
How HST Applies to New Homes in Ontario
In Ontario, the purchase of a brand-new home, a substantially renovated home or a newly constructed condominium unit from a builder is subject to the 13% Harmonized Sales Tax (HST). The HST is composed of two parts: the 5% federal portion (GST) and the 8% Ontario provincial portion. Resale homes — previously occupied properties sold between individuals — are exempt from HST and are not subject to any of the rebate programs discussed in this guide.
The HST on a new home is typically built into the purchase price advertised by the builder. When you sign the Agreement of Purchase and Sale, the purchase price includes HST — and any available rebates are assigned by the builder and credited to you at closing on the Statement of Adjustments. This means the builder collects the full HST from CRA and passes the rebate amount to you as a price reduction at closing.
For a $900,000 new home in Ontario, the HST would be $117,000 (13% of $900,000). Without any rebate, the total cost would be $1,017,000. With the enhanced 2026 Ontario NHR and federal FTHB rebate, qualifying buyers can recover the full $117,000 — reducing the total cost back to $900,000. Understanding which rebate programs you qualify for and ensuring the builder assigns them correctly at closing is one of the most consequential financial decisions in a new home purchase.
2026 Ontario Enhanced New Housing Rebate — Up to $130,000 Combined
On March 25, 2026, Ontario announced a temporary expansion of the HST new home rebate effective April 1, 2026 through March 31, 2027. The enhanced Ontario NHR provides 100% rebate of the 8% provincial HST on eligible new homes valued up to $1 million and is available to all buyers — not just first-time home buyers. The federal government has partnered with Ontario to match the provincial commitment, providing relief equivalent to the 5% federal portion as well. Together, the combined relief eliminates up to $130,000 in HST on qualifying new homes.
| Home Value | Provincial Rebate (8%) | Federal Match (5%) | Combined Rebate | Net HST Payable |
|---|---|---|---|---|
| $700,000 | $56,000 | $35,000 | $91,000 | $0 |
| $900,000 | $72,000 | $45,000 | $117,000 | $0 |
| $1,000,000 | $80,000 | $50,000 | $130,000 | $0 |
| $1,250,000 | $80,000 | $50,000 | $130,000 | $32,500 |
| $1,500,000 | $80,000 | $50,000 | $130,000 | $65,000 |
| $1,700,000 | $52,000 (phase-down) | $50,000 | $102,000 | $119,000 |
| $1,850,000+ | $24,000 (legacy max) | $50,000 | $74,000 | $166,500+ |
Key Eligibility Rules for the Enhanced Ontario NHR
The enhanced Ontario NHR applies to all buyers — first-time and repeat buyers, owner-occupants and investors purchasing new rental properties. The construction or substantial renovation must begin on or after April 1, 2026 and on or before March 31, 2027, and must be substantially completed on or before December 31, 2029. For purchased homes, the Agreement of Purchase and Sale must be entered into between April 1, 2026 and March 31, 2027.
Pending Legislation: The enhanced Ontario NHR requires passage of federal HST regulations and provincial legislation. Ontario's 2026 Budget announced the program, and both levels of government are working on implementation. The eligibility windows and amounts described above are based on the March 25, 2026 announcement and the 2026 Ontario Budget backgrounder. Please confirm final implementation details with a licensed CPA before making purchasing decisions based on these rebate amounts.
Standard GST/HST New Housing Rebate — Existing Rules
The standard HST new home rebate continues to apply to purchases that do not qualify for the 2026 enhanced program — including homes where the Agreement of Purchase and Sale was signed before April 1, 2026. Understanding the standard rebate is essential because many Ontario homes currently closing were contracted under the previous rules.
Federal GST New Housing Rebate (5% Portion)
| Home Value | Federal Rebate (36% of GST) | Maximum |
|---|---|---|
| Up to $350,000 | 36% of GST paid = 1.8% of home value | $6,300 |
| $350,001 – $450,000 | Rebate phases down linearly | $6,300 reducing to $0 |
| Over $450,000 | $0 | $0 |
Ontario Provincial New Housing Rebate (8% Portion)
| Home Value | Ontario Rebate (75% of provincial HST) | Maximum |
|---|---|---|
| Up to $400,000 | 75% of 8% = 6% of home value | $24,000 |
| Over $400,000 | Flat $24,000 | $24,000 |
Key Difference: Under the standard rules, the federal rebate disappears entirely above $450,000 — meaning a $500,000 home receives $0 federal rebate and only the $24,000 Ontario rebate. Under the 2026 enhanced program, the same home would receive the full combined $65,000 rebate (provincial + federal match). This difference is why the 2026 enhancement is the largest HST new home rebate change in Ontario history.
Worked Example: Standard NHR on a $600,000 New Home (Pre-Enhancement)
Purchase price: $600,000. Total HST: $78,000 (13%). Federal GST rebate: $0 (home exceeds $450,000 threshold). Ontario provincial rebate: $24,000 (flat maximum). Net HST after standard rebate: $54,000.
Standard rebate saves $24,000 — buyer pays $54,000 net HSTWorked Example: Enhanced 2026 NHR on Same $600,000 New Home
Purchase price: $600,000. Total HST: $78,000 (13%). Enhanced Ontario provincial rebate: $48,000 (100% of 8%). Federal match: $30,000 (100% of 5%). Combined rebate: $78,000.
Enhanced 2026 rebate saves $78,000 — buyer pays $0 net HSTFederal First-Time Home Buyers' GST/HST Rebate (Bill C-4)
The federal First-Time Home Buyers' (FTHB) GST/HST rebate is a separate program from the standard NHR and the enhanced Ontario NHR. Introduced under Bill C-4 with Royal Assent in 2025, the FTHB rebate provides first-time buyers with a rebate of up to $50,000 of the GST (or federal portion of the HST) on new homes valued up to $1.5 million.
| Requirement | Details |
|---|---|
| Buyer status | First-time home buyer — neither you nor your spouse/partner owned a home in the preceding four calendar years |
| Citizenship | Canadian citizen or permanent resident, 18 years or older |
| Home value cap | Up to $1,500,000 |
| Maximum rebate | $50,000 (5% federal GST on $1M) |
| Primary residence | Must be your primary place of residence — not investment or rental |
| Agreement date | Signed on or after March 20, 2025 and before 2031 |
| Completion | Substantially completed before 2036 |
| Owner-built | Construction begins on or after March 20, 2025 and before 2031 |
Stacking Rebates: The federal FTHB rebate can be combined with the enhanced Ontario NHR. A first-time buyer purchasing a $900,000 new home in Ontario with an agreement signed between April 1, 2026 and March 31, 2027 would qualify for the full enhanced Ontario NHR ($72,000 provincial + $45,000 federal match = $117,000) — resulting in $0 net HST. The FTHB rebate overlaps with the federal match portion for first-time buyers.
Who Qualifies for the HST New Home Rebate in Ontario?
Purchased from a Builder
You purchased a new or substantially renovated home, condo unit, duplex, mobile home or floating home from a builder. The home must be for use as your primary place of residence or that of a close family member (standard NHR). The enhanced 2026 Ontario NHR also covers investment rental properties.
Most common scenario — builder assigns rebate at closingOwner-Built Home
You built, or hired someone to build, a home on land you own or lease. You may also qualify if you substantially renovated your existing home or converted a non-residential property to residential use. You must apply directly to CRA.
Apply directly to CRA — Form GST191Co-operative Housing
You purchased a share of a co-operative housing corporation that entitles you to occupy a new or substantially renovated unit as your primary residence.
Enhanced Ontario NHR applies to co-op shares signed Apr 1, 2026 – Mar 31, 2027Eligibility Requirements — Standard HST New Home Rebate
| Requirement | Details |
|---|---|
| Type of home | New or substantially renovated — not a resale |
| Buyer type | Individual (not a partnership or corporation) |
| Primary residence | Home must be your primary place of residence or a close family member's |
| Occupancy | You or your family member must be the first to occupy the home after construction |
| Federal rebate cap | $450,000 for standard GST rebate (phases out $350K–$450K) |
| Ontario rebate cap | No price cap — $24,000 maximum on all Ontario homes (standard NHR) |
CRA Audit Warning — Primary Residence Requirement: CRA actively audits HST new home rebate claims in Ontario. If you claim the rebate as a primary residence but sell or rent the property within 12 months of closing, CRA will scrutinize the claim. If CRA determines you never intended to occupy the home as your primary residence, you must repay the full rebate plus interest and penalties under the Excise Tax Act. Incorrectly claiming primary residence status on an investment property is one of the most common HST audit triggers in the GTA.
The Self-Supply Rule — HST on New Homes Converted to Rental
If a builder constructs a new residential property and instead of selling it, rents it out, the self-supply rule under section 191 of the Excise Tax Act applies. The builder is deemed to have collected HST on the fair market value of the property at the time of first rental occupancy. This creates an immediate HST liability — even though no sale occurred and no cash changed hands.
For Ontario builders, the self-supply HST obligation on a new home valued at $800,000 at the time of first rental is $104,000 (13% of $800,000). The builder can then apply for the New Residential Rental Property Rebate (NRRPR) to recover a portion of the provincial HST. Under the enhanced 2026 Ontario NRRPR, qualifying rental properties may be eligible for up to $80,000 in provincial relief per unit — but only if construction begins between April 1, 2026 and March 31, 2027 and is substantially completed by December 31, 2029.
Self-Supply Timing Is Critical: The self-supply rule triggers the moment the first tenant occupies the property. The builder must report the deemed HST on the return for the period in which first occupancy occurs. Builders who do not account for the self-supply obligation in their cash flow planning can face six-figure HST assessments with no offsetting cash inflow. We review self-supply obligations for every builder client before the first rental unit is occupied.
How Builder Assignment Works at Closing
For most Ontario new home purchases, the buyer never files the rebate application directly with CRA. Instead, the builder assigns the rebate at closing. The process works as follows.
The builder includes the full HST in the purchase price. At closing, the builder credits the buyer with the rebate amount on the Statement of Adjustments — reducing the amount the buyer pays. The builder then files the rebate application with CRA and receives the rebate payment directly. The buyer receives the economic benefit through the reduced closing cost without ever filing a CRA form.
For the builder assignment to work, the buyer must sign CRA Form GST190 (or the equivalent section of the APS) assigning the rebate to the builder. The buyer certifies that they meet the eligibility requirements — including the primary residence requirement. If the builder does not pay or credit the rebate at closing, the buyer can file directly with CRA using Form GST190 and Form RC7190-ON (Ontario schedule).
Review Your Statement of Adjustments: Always verify that the HST rebate credit appears correctly on your Statement of Adjustments at closing. If the builder has not credited the rebate, ask your real estate lawyer to confirm the builder's obligation before closing. We review Statements of Adjustments for all clients purchasing new homes to ensure the rebate assignment is correct.
CRA Forms for the HST New Home Rebate
| Form | Purpose | Who Files |
|---|---|---|
| GST190 | HST New Housing Rebate — house purchased from a builder | Buyer (or builder by assignment) |
| RC7190-WS | Calculation worksheet for determining rebate amounts | Buyer — keep for records |
| RC7190-ON | Ontario New Housing Rebate schedule | Buyer (or builder) — required for Ontario provincial rebate |
| GST191 | HST New Housing Rebate — owner-built homes | Owner-builder |
| GST191-WS | Construction cost worksheet for owner-built homes | Owner-builder |
| GST524 | New Residential Rental Property Rebate (NRRPR) | Builder/landlord for rental properties |
All rebate applications can be filed electronically through CRA My Business Account. Paper applications are mailed to the Summerside Tax Centre (275 Pope Road, Summerside PE C1N 6A2). The filing deadline for owner-built homes is two years from the date the home is first occupied. For homes purchased from a builder where the builder does not assign the rebate, the deadline is two years from the date of closing.
Substantial Renovation and the HST New Home Rebate
The HST new home rebate also applies to substantially renovated homes. CRA defines a substantial renovation as the removal or replacement of all or substantially all (generally 90% or more) of the interior of an existing house — except for the foundation, exterior walls, interior supporting walls, roof, floors, and staircases. This is a high threshold and most renovations do not qualify.
If your renovation meets the substantial renovation threshold, the house is treated as a new home for HST purposes. You can claim the HST new home rebate on the GST/HST paid on the renovation costs using Form GST191 (owner-built). Major additions to existing homes may also qualify if the addition, together with the existing home, constitutes a substantially renovated house. Conversions of non-residential property (commercial, industrial) to residential use also qualify for the rebate.
90% Threshold: CRA interprets "substantially all" as 90% or more of the interior. Cosmetic upgrades (painting, flooring, fixtures) do not count. The renovation must involve replacing structural and functional components — plumbing, electrical, HVAC, drywall, insulation. Document every aspect of the renovation with photographs, contractor invoices and building permits. We assess substantial renovation eligibility for clients before work begins.
HST New Home Rebate — Worked Dollar Examples for Ontario
Real dollar calculations showing how much HST rebate applies at different price points under both the standard and enhanced 2026 programs.
| Home Value | Total HST (13%) | Standard NHR (Fed + Ont) | Net HST — Standard | Enhanced 2026 NHR | Net HST — Enhanced |
|---|---|---|---|---|---|
| $400,000 | $52,000 | $5,040 + $24,000 = $29,040 | $22,960 | $52,000 | $0 |
| $600,000 | $78,000 | $0 + $24,000 = $24,000 | $54,000 | $78,000 | $0 |
| $900,000 | $117,000 | $0 + $24,000 = $24,000 | $93,000 | $117,000 | $0 |
| $1,000,000 | $130,000 | $0 + $24,000 = $24,000 | $106,000 | $130,000 | $0 |
| $1,250,000 | $162,500 | $0 + $24,000 = $24,000 | $138,500 | $130,000 | $32,500 |
| $1,500,000 | $195,000 | $0 + $24,000 = $24,000 | $171,000 | $130,000 | $65,000 |
How Gondaliya CPA Helps with HST New Home Rebates
We handle HST new home rebate applications for Ontario home buyers and builders at flat-fee pricing. From verifying builder assignments on Statements of Adjustments to filing owner-built rebate claims and managing self-supply obligations for rental conversions — our licensed CPA team handles the entire process.
Frequently Asked Questions — HST New Home Rebate Ontario
Get Every Dollar of HST Rebate You Are Entitled To
Gondaliya CPA handles HST new home rebate applications, builder assignment verification, self-supply calculations and NRRPR claims for Ontario home buyers and builders at flat-fee pricing.
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