Irina Marchenkova · RE/MAX Realtron Realty
Do you pay HST on a new home in Ontario? How the 2026 federal and Ontario rebates work, who qualifies, and how buyers can pay far less, or none at all.
By Irina Marchenkova, Sales Representative, RE/MAX Realtron Realty · Last updated October 2026
If you are buying a newly built home in Ontario, HST can add tens of thousands of dollars to the price. The good news: 2025 and 2026 brought the biggest HST relief for new-home buyers in decades. Depending on when you sign and whether you are a first-time buyer, you may pay much less HST, or none at all, on a new home up to $1 million. Here is how it works.
Yes. In Ontario, the purchase of a newly built or substantially renovated home is subject to 13% HST: the 5% federal part (GST) and the 8% provincial part. A substantial renovation generally means that 90% or more of the interior was removed or replaced.
Resale homes, meaning homes that were previously lived in, are generally exempt from HST. That is one of the biggest cost differences between buying new and buying resale.
Most builders quote prices including HST, with the buyer assigning the standard rebates to the builder in the agreement of purchase and sale. Always read the HST clause in your agreement carefully, so you know whether the price assumes you qualify for a rebate and what happens if you do not.
Now law and open for applications, this rebate removes the full 5% federal part of the HST on a new home valued up to $1 million. For homes between $1 million and $1.5 million, the rebate is reduced gradually (for example, about $25,000 on a $1.25 million home), and there is no rebate at $1.5 million and above. It applies to agreements with a builder signed on or after March 20, 2025 and before 2031.
Ontario’s matching rebate covers the 8% provincial part of the HST for first-time buyers, up to $80,000, and follows the same eligibility rules as the federal rebate. Together, an eligible first-time buyer can get back up to $130,000, which means no HST at all on a new home up to $1 million.
For agreements with a builder signed between April 1, 2026 and March 31, 2027, any eligible buyer, not just first-time buyers, may get up to $80,000 of the provincial 8% back on a new home valued under $1.85 million. The full 8% is covered up to $1 million and a flat $80,000 from $1 million to $1.5 million. Buyers who qualify can also receive the Ontario new home affordability payment of up to $50,000, equal to the federal 5%, reduced by any federal rebate you already receive.
Watch the dates: an agreement signed before April 1, 2026 and later changed or assigned does not qualify, and for assignment sales both the original agreement and the assignment must fall inside the window.
The long-standing rebates still apply to buyers who do not qualify for the programs above: the federal new housing rebate (up to $6,300, for homes under $450,000) and the Ontario new housing rebate (75% of the provincial part, up to $24,000, with no price cap).
| Situation (new home, primary residence) | HST at 13% | Possible rebates | Approximate HST paid |
|---|---|---|---|
| First-time buyer, $800,000 new condo | $104,000 | Federal FTHB $40,000 + Ontario FTHB $64,000 | $0 |
| Move-up buyer, $800,000 new home, agreement signed June 2026 | $104,000 | Ontario enhanced rebate $64,000 + Ontario payment $40,000 | About $0 |
| Move-up buyer, $800,000 new home, agreement signed in 2025 | $104,000 | Ontario new housing rebate $24,000 | About $80,000 |
| First-time buyer, $1.25 million new home | $162,500 | Federal FTHB about $25,000 + Ontario rebates | Partial relief |
Simplified examples for illustration. Exact amounts depend on how the price is structured, what your builder credits, and the CRA’s assessment.
For the federal and Ontario first-time buyer HST rebates, you generally must:
This is a different test from the Ontario land transfer tax refund, which requires that you have never owned a home anywhere. Someone who sold a home five or more years ago may qualify for the HST rebate but not the land transfer tax refund. Full details: CRA: who can apply.
You cannot simply opt out of HST on a new home, but you can legally pay far less:
In most cases, the builder credits the rebates to you at closing, and the price you see already reflects them. If the builder does not credit them, or you build your own home, you apply to the CRA using Form GST190 (or GST191 for owner-built homes) with the Ontario schedule RC7190-ON (or RC7191-ON). The Ontario new home affordability payment does not need a separate application: you give consent on the rebate form, and the Province pays it separately. Learn more: CRA: GST/HST new housing rebate and CRA Notice 346: Ontario enhanced new housing rebate.
New homes and pre-construction come with long contracts, deposit schedules and tax clauses that are easy to miss. I help buyers compare builders, review the key terms with their lawyer, and make sure the rebates they qualify for are reflected in the deal. See my pre-construction guide and guide to deposits, or get in touch.
Generally no. HST applies to new and substantially renovated homes. Resale homes are usually exempt, although you still pay land transfer tax.
13% of the price: 5% federal and 8% provincial. On an $800,000 home that is $104,000 before rebates. With the 2025–2026 rebates, many buyers of homes up to $1 million can recover most or all of it.
No. For agreements signed with a builder between April 1, 2026 and March 31, 2027, it is available to any eligible buyer of a new home that will be their or a relative’s primary residence, valued under $1.85 million.
For the first-time buyer HST rebates, what matters is whether you lived in a home that you or your spouse owned, in Canada or abroad, in the current year or the previous four years. If not, you may still qualify.
Yes, if you meet the conditions, including using the unit as your primary residence. For assignment sales, special rules apply to the dates of both agreements.
This guide is general information based on CRA guidance as of October 2026, not tax or legal advice. Rebate rules are detailed and change often. Confirm your eligibility with your lawyer, builder and the CRA before you sign.
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