Understanding HST rebates on pre-construction homes and condominiums has always been complex. As of 2026, additional programs from the federal and provincial governments have added new layers of change. Some programs are already in force; others remain proposed or are progressing through legislation. This summary explains the current rules and expected changes.
- The existing GST/HST new housing rebate
This longstanding program provides a partial recovery of GST/HST paid on newly constructed or substantially renovated homes when the buyer intends to use the home as their primary residence. In most cases the federal rebate is capped at $24,000. Buyers commonly assign the rebate to the builder, who credits the amount on closing provided the buyer qualifies. This program remains unchanged.
- The new federal First-Time Home Buyer (FTHB) GST/HST rebate
On March 12, 2026, legislation was passed introducing an enhanced rebate for first-time buyers. Qualifying first-time buyers may receive a rebate of up to 100% of the 5% federal GST on qualifying new homes, to a maximum federal rebate of $50,000. The rebate effectively eliminates the federal portion of GST/HST for eligible first-time buyers on homes valued up to $1,000,000. For homes between $1,000,000 and $1,500,000 the rebate is reduced on a sliding scale; homes above $1,500,000 are ineligible.
Eligibility
To qualify, the buyer must:
- Be at least 18 years old;
- Be a Canadian citizen or permanent resident; and
- Be a first-time home buyer (the buyer — and the buyer’s spouse or common‑law partner — have not ordinarily lived in a home owned, or jointly owned, as a primary place of residence in the current calendar year or any of the previous four calendar years).
The FTHB rebate is a one-time benefit. A buyer is ineligible if they or their spouse/common‑law partner previously received this federal rebate.
Timing
The federal FTHB rebate applies retroactively to Agreements of Purchase and Sale entered into after March 20, 2025. Construction or renovation must begin before January 1, 2031, and the home must be substantially complete with ownership transferred to the buyer before January 1, 2036.
Qualifying homes
The rebate applies to:
- Newly built or substantially renovated homes purchased from a builder; and
- Newly built or substantially renovated homes built by or for the buyer.
Eligible property types include freehold houses, residential condominium units, duplexes, and mobile homes. The buyer must intend to occupy the home as their primary residence and be the first individual to occupy it.
How the rebate applies
There are two ways to receive the rebate:
- Assignment to the builder on closing — the builder submits the rebate application to CRA and credits the buyer on closing. Builders commonly require evidence the buyer qualifies and may exercise contractual discretion to refuse an assignment, in which case the buyer must apply to CRA after closing.
- Direct application to CRA by the buyer after closing, if the builder will not provide the rebate at closing.
The rebate is not available to an assignee if the original purchase agreement was entered into before March 20, 2025, nor for agreements that were terminated and re‑entered solely to qualify for the rebate.
- Ontario’s proposed first-time buyer rebate
On March 25, 2026 Ontario announced a proposed rebate that would match the federal relief and provide a provincial rebate reducing most or all HST for eligible buyers of new homes valued up to $1,000,000, with a maximum provincial rebate of $130,000. Homes priced between $1,000,000 and $1.5 million would receive a reduced rebate ; homes between $1.5 million and $1.85 million would receive a declining reduction. The intent is to largely eliminate the HST burden for qualifying first‑time buyers.
As of April 7, 2026 this provincial rebate is not yet in force; it requires legislative approval and administrative rollout. If approved, it is expected to apply to agreements entered on or after March 20, 2025 and before 2031.
- Ontario’s proposed rebate for all buyers
The 2026 Ontario budget also proposed a broader HST rebate available to all buyers of newly built homes (not limited to first‑time buyers). Details are incomplete, but it is expected to target the Ontario 8% portion of HST, include occupancy/use requirements, and apply to agreements entered between April 1, 2026 and March 31, 2027. This program remains proposed and not yet approved as of April 7, 2026.
- Status as of April 7, 2026
Currently in effect:
- The existing GST/HST new housing rebate for qualifying buyers; and
- The enhanced federal FTHB GST/HST rebate.
Not yet fully approved or implemented:
- Ontario’s proposed full rebate for first‑time buyers;
- Ontario’s proposed broader rebate for all buyers; and
- Any broader federal rebate for all buyers.
Practical considerations and risks:
Some builders may offer to apply proposed rebates at closing or may price projects anticipating rebates that are not yet approved. This creates risks: if a rebate is not approved or a buyer does not qualify, the buyer may need to provide additional funds at closing. If you are buying a new build, be sure to:
- Check the date on your Agreement of Purchase and Sale;
- Review rebate and assignment clauses carefully; and
- Consider how you will use the property — primary residence use increases the likelihood of qualifying.