Over the past year, the Ontario government has announced new and expanded HST Relief on New Housing. The expanded HST Rebates promised to provide HST relief on most newly constructed housing up to $130,000. Unsurprisingly, many buyers and builders have been eager to take advantage of the expanded relief.

Unfortunately, the enactment of the expanded HST relief has faced delays, with many buyers and builders feeling frustrated and confused. This article aims to clarify the proposed changes and detail the ongoing implementation process to provide buyers with an up-to-date summary.

The Expanded Relief

There are two streams that have been announced by the Ontario government in the past year that would expand the existing HST Rebate on new housing.

The narrower first stream, initially announced on October 28, 2025, is the Ontario First-Time Home Buyer rebate, which would rebate the full 8% provincial portion of HST on qualifying new homes valued up to $1 million for first-time home buyers. Combined with the Federal First-Time Home Buyer rebate, which provides a rebate for the full 5% federal portion of HST on qualifying new homes valued up to $1 million for first-time home buyers, the full amount of the HST can be rebated to qualifying buyers. For homes valued between $1 million and $1.5 million, the Ontario and Federal rebates are gradually reduced linearly. The Ontario portion has a minimum rebate amount of $24,000, whereas the Federal portion has no minimum rebate. For homes valued at or above $1.5 million, only the $24,000 Ontario rebate minimum is available.

The First-Time Home Buyers Rebate Schedule:

Eligibility requirements for the First-Time Home Buyers’ rebate are the same for both provincial and federal portions and are:

• must be 18 years of age or older;
• must be a Canadian citizen or Permanent Resident;
• must be purchasing from a builder (or owner-built property) for their primary residence;
• must not have lived in a home they or their spouse owned;
• must be the first occupant of the home;
• the Agreement of Purchase and Sale between buyer and builder was signed between March 20, 2025, and before 2031;
• Only one of the purchasers needs to meet the above criteria to be eligible.

The broader second stream, announced as part of Ontario’s 2026 Budget and in collaboration with the federal government, proposes a temporary rebate on the full 13% HST on qualifying new homes up to $130,000, available to all buyers (not just first-time) and to qualifying rentals. The rebate would run for a period of one year, from April 1, 2026, to March 31, 2027. For homes valued up to $1 million, the proposed rebate is the full 13% of HST. Between $1 million and $1.5 million, the proposed rebate is $130,000. Between $1.5 million and $1.85 million, the proposed rebate phases out linearly down to the $24,000 minimum. Above $1,850,000, the proposed rebate is only the $24,000 minimum.

The enhanced HST Relief on New Housing Schedule:

Eligibility for the enhanced HST rebate is separated into two categories: new homes to be used as a primary residence and new homes to be used as a residential rental property.

Eligibility requirements for the first category are:

• the Agreement of Purchase and Sale between the buyer and the builder was signed between April 1, 2026, and March 31, 2027; and
• the construction begins on or before December 31, 2028, and is substantially completed on or before December 31, 2031.

Eligibility requirements for the second category:

• the Agreement of Purchase and Sale between the buyer and the builder was signed between April 1, 2026, and March 31, 2027; and
• the construction is substantially completed on or before December 31, 2029.

Implementation

Let’s start with the good news first. Following the enactment of the Making Life More Affordable for Canadians Act, on March 12, 2026, the narrower first stream has been implemented, and the CRA can now process claims.

Unfortunately, the same cannot be said for the broader HST rebate for new housing. The proposed changes are not enacted, but steps have been taken towards enactment. On May 5, 2026, the Ontario government introduced the HST Relief Implementation Act (Residential Property Rebates), 2026. The Act is necessary to enable the Ontario government to provide relief on the federal portion of the HST, with the federal government providing a transfer payment to Ontario to cover this cost to the province. The Act received Royal Assent on May 12, 2026. Now the burden has shifted to the federal government to make its necessary regulatory amendments and to implement the program through the CRA. No timeline has been provided by the federal government.

Once applications for the broader HST relief open, eligible buyers should be able to apply for the relief. Purchases made between April 1, 2026, and the opening date of applications will still qualify provided all other eligibility requirements are met. However, since the broader relief is not yet law, buyers should treat the broader relief as contingent. Closings before applications open will require paying provincial HST and claiming directly from the CRA, rather than receiving a builder credit.  

Currently Available HST Rebates

For an overview of the existing and base HST rebates for new housing, see our article here.

This blog was co-authored by summer law student Trevor Herr.