Ontario’s $130,000 HST Rebate, Explained

Important: As of May 2026, Ontario's provincial portion of this rebate is now law — Bill 114 (HST Relief Implementation Act) received Royal Assent on May 12, 2026. The federal portion for non-first-time buyers remains pending federal legislation. This article is intended for general informational purposes only and should not be considered legal, tax, or financial advice. Eligibility and rebate amounts depend on final legislation, project structure, and individual circumstances.

Ontario has introduced the largest residential tax relief measure in a generation. Homeowners building new custom homes, qualifying multiplexes, or substantially renovated properties may now qualify for up to $130,000 in combined HST relief, depending on buyer status and pending federal legislation, but only for purchase agreements signed before March 31, 2027.

This guide breaks down exactly what changed, who qualifies, how much you can save, and what Toronto homeowners need to do before the window closes.

Ontario HST Rebate 2026, Quick Facts

• Maximum rebate: up to $130,000
• Applies to qualifying new homes and substantial renovations
• Agreement must be signed between April 1, 2026 and March 31, 2027
• Includes custom homes, tear-down rebuilds, multiplexes, and some rental properties
• Resale homes do not qualify
• Provincial portion (up to $80K) is now law as of May 12, 2026; federal portion (additional $50K) still pending for non-first-time buyers

What Is Ontario’s Expanded HST Rebate?

On March 25, 2026, the Government of Ontario announced a one-year expansion of the HST New Housing Rebate program in partnership with the federal government. The proposed expanded rebate could offset up to the equivalent of the full 13% HST on qualifying new home purchases, up to a maximum of $130,000.

This builds on the existing New Housing Rebate (NHR) and New Residential Rental Property Rebate (NRRPR) programs, which previously capped relief at $24,000 and were limited to first-time buyers.

The expanded program is fundamentally different in three ways:

• Open to all buyers, not just first-time purchasers
• Covers both federal (5%) and provincial (8%) HST portions
• Increased maximum rebate to $130,000 (from $24,000)

Who Qualifies for the $130,000 HST Rebate?

The expanded rebate applies to buyers and builders who meet four key conditions:

1. New Construction or Substantial Renovation

The rebate is for newly built homes or properties that meet the legal definition of substantial renovation. Resale homes do not qualify.

Qualifying project types include:

• New custom home builds
• Tear-down and rebuild on existing lots
• Pre-construction condos and townhouses
• New multiplex builds (duplex, triplex, fourplex, sixplex)
• Substantial renovations where 90%+ of the existing structure is removed or replaced

Projects that do not qualify:

• Kitchen or bathroom renovations
• Basement finishes
• Most additions and extensions
• Cosmetic remodels

2. Agreement of Purchase and Sale Signed in the Window

The purchase agreement (or construction contract with a builder) must be signed between April 1, 2026 and March 31, 2027. The agreement date determines eligibility, not the closing date or move-in date.

3. Primary Residence or Long-Term Residential Rental

The home must be used as either:

• The buyer’s primary residence, or
• A long-term residential rental property

Short-term rentals (Airbnb, vacation rentals) and commercial properties do not qualify.

4. Construction Completion Deadlines

Construction must:

• Begin by December 31, 2028
• Be substantially complete by December 31, 2031 for primary residences
• Be substantially complete by December 31, 2029 for rental properties

How Much Is the Rebate Worth?

The rebate scales based on home value:

Note: The federal portion for non-first-time buyers has been announced and budgeted but not yet enacted. Toronto custom home builds in neighbourhoods like Willowdale, Bayview Village, and Lawrence Park typically fall in the $1.5M–$2.5M range, where the rebate begins to scale down.

What Counts as “Substantial Renovation”?

The Canada Revenue Agency defines substantial renovation as a project where 90% or more of the existing building’s interior is removed or replaced.

This includes:

• Foundation
• Exterior walls
• Interior walls
• Floors
• Roof
• Staircases

In practical terms:

• Qualifies: Full gut rebuild where the home is stripped to foundation and reframed
• Qualifies: Tear-down with new build on the same lot
• Usually doesn’t qualify: Additions that double square footage but retain the original structure
• Doesn’t qualify: Single-room renovations, basement finishes, kitchen updates

Projects that fall in the gray zone should be reviewed with a tax professional before construction begins.

Who Can Claim the Rebate?

The expanded rebate is open to a wide range of buyers and investors:

• First-time home buyers building new
• Move-up buyers purchasing or building a new principal residence
• Downsizers building smaller new homes
• Real estate investors building qualifying rental properties
• Homeowners doing full tear-down rebuilds on existing lots
• Multiplex developers building 2–6 unit residential rentals

The rebate is not restricted by income, citizenship status, or prior homeownership. The primary tests are project type and intended use.

How to Apply for the HST Rebate

There are two main paths to claim the rebate:

Path 1: Builder Credits at Closing (Most Common)

When buying a new home from a registered builder, the builder typically applies the rebate directly. The HST is collected, the builder applies to CRA for the rebate, and the amount is credited against the purchase price.

Used for:

• Pre-construction condo purchases
• Production builder purchases
• Custom builds where the builder is the GST/HST registrant

Path 2: Direct Application to CRA

When the homeowner acts as their own general contractor, contracts trades directly, or the builder doesn’t credit the rebate at closing, the homeowner files directly with CRA.

Forms required:

• GST190: Builder-purchased homes
• GST191: Owner-built homes

Applications can be submitted through a CRA account online or by mail.

Key Deadlines and Important Dates

Toronto Custom Home Build Costs Under the Rebate

The rebate’s real impact depends on total project value. Below are typical Toronto custom home build costs in 2026:

Note: Build costs vary significantly based on lot conditions, design complexity, finish levels, and current material pricing. A fixed-price contract with a licensed builder is the most reliable way to lock in project cost before construction begins.

Current Legal Status (Updated May 2026)

The HST rebate is now partially in force:

What’s law today:

• Provincial 8% HST rebate (up to $80,000): Active. Ontario’s Bill 114 received Royal Assent on May 12, 2026.
• Federal 5% GST rebate for first-time home buyers (up to $50,000): Active. Federal Bill C-4 received Royal Assent on March 12, 2026.

What’s still pending:

• Federal 5% GST rebate for non-first-time buyers (additional $50,000): Announced but not yet enacted by Parliament.

For most Toronto homeowners considering a tear-down rebuild or multiplex conversion, this means $80,000 in provincial relief is available now, with an additional $50,000 potentially available pending federal action. The combined $130,000 figure remains achievable but currently requires either first-time buyer status or the completion of federal legislation expected to follow.

Toronto Neighbourhoods Where the Rebate Matters Most

The rebate’s value is most pronounced in neighbourhoods with active custom build activity and detached lots suitable for tear-down or rebuild:

• North York (Willowdale, Lansing, Newtonbrook, Bayview Village)
• Lawrence Park
• Forest Hill
• Ledbury Park
• Leaside
• Rosedale
• The Kingsway (Etobicoke)

In these areas, mature lots, strong resale comparables, and as-of-right zoning for both custom builds and multiplex conversions make the rebate window particularly significant.

What Toronto Homeowners Should Do Next

For homeowners considering a new build, tear-down rebuild, or multiplex conversion within the rebate window:

1. Confirm Project Type and Eligibility

Verify whether your project meets the new construction or substantial renovation criteria. Additions and partial renovations generally do not qualify.

2. Assess Lot and Zoning

Confirm what’s permitted on your lot as-of-right, including multiplex eligibility (2–6 units) under Toronto’s current zoning rules.

3. Engage a Licensed Builder Early

Design, permits, and contract preparation typically take 3–6 months before construction can begin. Starting early ensures the agreement is signed within the rebate window without rushing critical planning phases.

4. Consult a Tax Professional

For rebate eligibility specific to your situation, particularly for owner-built homes and multi-unit residential rentals, a tax advisor or real estate lawyer should confirm the application path.

5. Lock in a Fixed-Price Contract

Cost certainty matters more during periods of regulatory change. A fixed-price construction contract protects against material and labour cost escalation during the build period.

Frequently Asked Questions

How much can I save with the expanded HST rebate?

Up to $130,000 for homes valued between $1,000,000 and $1,500,000, with scaled amounts above and below this range.

Do I have to be a first-time buyer?

No. The provincial rebate applies broadly to eligible buyers, including investors and move-up buyers. The federal portion is already active for first-time buyers and remains pending legislation for other buyer types.

Does the rebate apply to resale homes?

No. Only newly constructed or substantially renovated homes are eligible. Resale homes are not subject to HST.

What if I already own the land?

The rebate still applies to qualifying new construction on your existing lot. Owner-built projects typically claim through CRA Form GST191.

Can I claim the rebate on a rental property?

Yes. Qualifying long-term residential rental properties are eligible through the New Residential Rental Property Rebate.

Is the rebate guaranteed?

The provincial portion (up to $80,000) is now law as of May 12, 2026. The federal portion for non-first-time buyers (additional $50,000) is pending federal legislation. First-time buyers can already access both portions today.

The HST rebate window represents a significant opportunity for Toronto homeowners considering new construction or substantial renovation. With proper planning, project structure, and timing, qualifying homeowners may recover up to $130,000 in HST, but the window closes March 31, 2027.

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