Key takeaways
- A new-home price described as “including HST” may assume the buyer qualifies for a rebate assigned to the builder.
- First-time-buyer rebates and the ordinary new-housing rebates are different programs.
- Ontario introduced additional relief in 2026, including a temporary enhanced rebate for certain agreements.
- Intended rental use, assignment purchases and an ineligible co-purchaser can change the analysis.
Why is HST charged on a new home?
A builder generally charges GST/HST on a taxable sale of newly built or substantially renovated housing. In Ontario, HST combines a 5% federal portion and an 8% provincial portion. A typical resale of a previously occupied personal residence is usually treated differently. [1]
The word “new” is not the only test. Substantial renovations, a seller’s activities and the particular supply can affect the tax result. Your lawyer should review the agreement rather than assume the treatment from a listing category.
Ask for the price before tax, tax payable, rebate assumptions and resulting closing balance. That breakdown is especially useful where the builder advertises a net price.
Does “HST included” mean there is nothing more to pay?
Not necessarily. A builder may quote a price that includes HST after crediting a rebate the buyer is expected to qualify for and assign to the builder. The buyer normally signs declarations supporting that claim. [2]
If your circumstances do not satisfy the rebate conditions, the contract may require you to pay an additional amount on closing. Renting the property when the agreement assumes personal occupation is one common concern. Buying with another person can also require careful eligibility review.
Do not sign a declaration simply because the rebate appears in the price. Confirm that the facts are accurate and ask your lawyer how the contract allocates the risk of a denied claim.
What is the ordinary new-housing rebate?
The ordinary GST/HST new-housing rebate can return part of the tax on a qualifying purchase or construction. It has its own residence, price and application requirements and is not limited to first-time buyers. The ordinary federal component phases out at relatively low home values; the Ontario component has a different calculation. [2]
Those familiar rules still matter, but they no longer tell the whole story in 2026. New first-time-buyer and Ontario enhanced programs may provide additional relief. The applications must account for the interaction between programs so the same tax is not rebated twice.
What can qualifying first-time buyers receive?
The federal first-time home buyers’ GST/HST rebate can provide relief of up to $50,000 for the federal tax on a qualifying new home. Full federal relief applies up to $1 million, with reduced relief for values above $1 million and below $1.5 million. [3]
The program generally requires an eligible adult Canadian citizen or permanent resident, a qualifying first-time-buyer history and use of the home as a primary residence. For a house and land purchased from a builder, the agreement generally must be entered into on or after March 20, 2025 and before 2031, with additional construction and ownership-transfer deadlines. [4]
Ontario’s first-time-buyer rebate can also provide relief for the provincial portion, up to $80,000 on a qualifying purchase. It operates with the existing Ontario rebate rather than as a second unrestricted payment. [3]
What changed with Ontario’s enhanced relief in 2026?
The temporary Ontario enhanced new-housing rebate can apply to qualifying builder agreements entered into from April 1, 2026 to March 31, 2027. It is available beyond first-time buyers, but has residence, construction, completion and tax-payment conditions. [5]
Together with the ordinary Ontario new-housing rebate, it can provide combined provincial relief of up to $80,000. For the standard purchase of house and land, the enhanced schedule provides full provincial relief up to $1 million, $80,000 through $1.5 million, and reduced relief below $1.85 million. Separate valuation rules apply to some other housing arrangements.
A related Ontario new home affordability payment may provide additional relief equivalent to some federal tax. It is reduced by applicable federal housing rebates and is administered by Ontario. Do not add every program’s advertised maximum together. The combined result must be calculated for your home and contract. [5]
What if I will rent out the property or buy an assignment?
Rental housing has separate rebate rules. An owner-occupier rebate should not be claimed on facts that do not satisfy its occupancy requirements. Tell your lawyer about your actual plan before signing the agreement and rebate documents. [2]
An assignment introduces another transaction and additional tax questions. The price paid for the assignment, dates of both agreements and eligibility of the ultimate purchaser can affect tax and rebates. For Ontario’s enhanced rebate, both the original agreement and the assignment generally need to fall within the specified window. [5]
About the author — Kubeskaran Navaratnam
Kubeskaran Navaratnam is the Managing Partner of iClosed and a lawyer licensed by the Law Society of Ontario (LSO #60539H, licensed since 2011). His practice is Ontario residential real estate, acting for buyers, sellers and lenders on resale, new-build and condominium closings across the Greater Toronto Area. His Law Society record can be verified at https://lsodirectory.lso.ca/en-US/licensee-detail/?lawsocietynumber=60539H. This article is general information about Ontario law and practice, not legal advice. It does not create a lawyer-client relationship. For advice on your own transaction, speak with a licensed Ontario real estate lawyer.
Sources
1. CRA — GST/HST and home construction. — https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/charge-collect-home-construction.html
2. CRA — GST/HST New Housing Rebate guide RC4028. — https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4028/gst-hst-new-housing-rebate.html
3. CRA — First-time home buyers’ GST/HST rebate. — https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html
4. CRA — Who can apply for the first-time home buyers’ rebate. — https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate/who-can-apply.html
5. CRA — Ontario Enhanced New Housing Rebate Notice 346. — https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/notice346/ontario-enhanced-new-housing-rebate.html
This article provides general information about Ontario law and closing practice as of October 26, 2026. It is not legal or tax advice and does not create a lawyer-client relationship. Your agreement of purchase and sale, your lender’s instructions and your own circumstances control what applies to you. Rates, thresholds and rules change — confirm current figures before relying on them.