Everything You Need to Know About Ontario’s New New-Construction HST Rebate
If you keep an eye on the news, you’ve likely caught wind of the Ontario government’s massive new rebate program targeting new construction properties. This major change officially came into place at the end of June, and it is a complete game-changer for buyers looking at brand-new builds or major renovations. While legislation is evolving, I recently attended a seminar on the changes, and want to share what I've learned with my readers.
Because navigating tax rebates can feel a bit like reading a different language, let’s break down the essential highlights, timelines, and tips you need to know right now.
What is the New HST Rebate?
The provincial government has legislated an HST rebate to stimulate new construction sales. The rebate has 2 components, an 8% provincial contribution & a 5% federal contribution.
HST Rebate Savings:
You can receive a rebate of up to $130,000 for a property valued up to $1,000,000. Rebates on homes priced over $1,000,000 are capped.
What properties qualify for the rebate?
The rebate applies directly to new builds purchased from builders, owner-built homes, and substantial renovations where 90% or more of the original structure is transformed.
This program requires a strict intent for the property to be used as a primary residence or a long-term lease of at least one year. If you are looking to buy a short-term rental property (like an Airbnb), you are strictly excluded.
Critical Timelines and Rules
To qualify, sales agreements must be signed between April 1, 2026, and March 31, 2027. Additionally, there are specific construction start and completion dates required to qualify. And if you are thinking about canceling an existing contract just to re-sign and catch the rebate, the government is one step ahead—the regulations explicitly prevent "canceling and re-signing" tactics.
(Note: While the provincial 8% portion is locked in, the federal 5% portion of the tax remains unregulated for now.)
Buyer Beware: Why You Need a Legal Review if you think your purchase qualifies for an HST rebate
Right now, there is no "standard process" across the board for how this rebate is handled. Because every single builder is managing the paperwork and structures differently, you cannot just assume everything is covered. Before you sign on the dotted line for a new build, make sure you have a legal review condition in your purchase agreement. This ensures your lawyer can dig into the fine print and verify exactly how the builder handles the rebate and if the property truly qualifies. This is super important in freehold homes where there is currently no cooling off period (like condos)
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