If you are buying a new build in Ontario, the HST rebate is one of the most misunderstood lines on your purchase agreement. Builders often advertise prices "inclusive of rebate," which means the rebate has already been assumed and credited. And if you don't qualify for it, you're on the hook to repay the difference.
Here is how the rebate actually works in 2026.
Two Rebates, Not One
The HST rebate on new housing has two components:
- Federal rebate. A partial rebate of the 5% federal GST portion of HST. Capped on homes priced over $350,000 and phased out completely at $450,000.
- Ontario rebate. A partial rebate of the 8% provincial HST portion. Capped at $24,000 regardless of home price.
The federal rebate phases out as price climbs. The Ontario rebate does not.
Owner-Occupied vs. Rental
Two flavours of rebate exist depending on how you use the home:
- New Housing Rebate. For buyers who will live in the home (or have an immediate family member live in it) as their primary residence.
- New Residential Rental Property Rebate. For buyers who will rent the home out long-term. You pay HST up front at closing and claim the rebate after closing.
If you are buying as an investment, you cannot claim the New Housing Rebate. Many buyers (and some builders) get this wrong, which leads to CRA reassessments years later.
Why the "Inclusive of Rebate" Pricing Matters
Most Ontario builders price homes as "inclusive of HST and rebate". Meaning they assume the buyer qualifies and credit the rebate into the price. The buyer signs a direction at closing to assign the rebate to the builder, who then claims it.
If you do not qualify (you bought it as an investment, you do not meet the residency requirements, you assigned the agreement) the builder bills you for the rebate amount at closing. Sometimes a $24,000+ surprise.
Plus the Proposed Bill C-4 First-Time Buyer Rebate
If Parliament passes Bill C-4, first-time buyers of new construction homes up to $1 million may also be eligible for an additional federal GST rebate of up to $50,000. This is on top of the existing New Housing Rebate, not in place of it. The bill has not received Royal Assent as of early 2026.
What to Do Before You Sign
- Read your Agreement of Purchase and Sale carefully for any HST and rebate clauses. Most builder agreements include language assigning the rebate.
- Confirm your status. Will you actually move in? Is the rebate assumption in the contract accurate for your situation?
- Get a lawyer to review before you sign. New-build agreements are highly skewed toward the builder and HST clauses are usually the most punitive.
If you have a builder agreement in hand and want to know exactly what HST will cost you at closing, get a free quote. We read every builder amendment and flag the HST exposure before you sign.