Buying a new home from a builder adds one major cost that resale buyers don't face: GST or HST on the full purchase price. A $500,000 new home in Ontario carries $65,000 in HST: before any rebate. That's a significant amount, and most buyers don't know they could claw back a substantial portion of it through the GST/HST New Housing Rebate. If you're building, buying new construction, or substantially renovating a home in Canada, this rebate could be worth tens of thousands of dollars, but it comes with specific eligibility rules that many buyers miss.
GST/HST New Housing Rebate Formula
Federal Rebate = 36% of GST paid × (Price factor for homes $350K–$450K)
Homes priced at or below $350,000 get the full 36% federal rebate (max $6,300). Between $350,000 and $450,000, it phases out. Above $450,000, no federal rebate applies, but Ontario's provincial portion may still provide a rebate.
Federal GST/HST New Housing Rebate: How It Works
The federal New Housing Rebate applies to the GST component of your purchase price. On a 5% GST amount (or the 5% federal component of an HST amount), the government rebates 36% of the GST paid: up to a maximum of $6,300. The maximum is reached when the home's pre-tax price is $350,000 (GST = $17,500; 36% of $17,500 = $6,300).
For homes priced between $350,001 and $450,000, the rebate phases out linearly to zero. Above $450,000, no federal rebate applies. However, the Ontario provincial rebate (see below) operates under different rules and can apply even to higher-priced homes.
| New Home Price (Pre-tax) | Federal Rebate | Ontario Provincial Rebate | Total Rebate (Ontario) |
|---|---|---|---|
| $300,000 | $5,400 | $6,720 | $12,120 |
| $350,000 | $6,300 (max) | $7,560 | $13,860 |
| $400,000 | $4,200 (phases out) | $8,640 | $12,840 |
| $450,000 | $0 (eliminated) | $9,720 | $9,720 |
| $500,000 | $0 | $10,800 | $10,800 |
| $600,000 | $0 | $12,960 | $12,960 |
⚠️ Estimates based on 2026 CRA rebate rules. Ontario provincial rebate is 75% of the provincial portion of HST (8% × purchase price × 75%). The $450,000 threshold for federal phase-out refers to the fair market value of the home. Source: CRA — GST/HST Housing Rebates. Consult a lawyer or accountant before claiming.
Provincial New Housing Rebates
In addition to the federal rebate, HST provinces (Ontario, Nova Scotia, New Brunswick, Newfoundland, PEI) have their own provincial rebates on the provincial component of HST. These operate differently from the federal rebate:
| Province | HST Rate | Provincial Rebate Structure | Max Provincial Rebate |
|---|---|---|---|
| Ontario | 13% | 75% of 8% provincial portion, no price cap for provincial portion | Varies with price; no upper limit eliminated |
| Nova Scotia | 15% | 18.75% of provincial HST portion (18.75% of 10% = 1.875%) | ~$3,000 on $160,000 qualifying price |
| New Brunswick | 15% | 31.25% of provincial HST portion, home must be under $350K pre-rebate | ~$4,374 on qualifying homes |
| PEI | 15% | Partial rebate of provincial portion | ⚠️ Verify with CRA — rules vary |
| Newfoundland | 15% | Partial rebate of provincial portion | ⚠️ Verify with CRA — rules vary |
| BC / Alberta | 12% / 5% | Federal rebate only (no HST provincial component to rebate) | Federal portion only |
Who Qualifies for the New Housing Rebate?
The rebate sounds simple, but eligibility has specific requirements. Missing any of these conditions means no rebate:
- Must be a new home: Built by a builder, a substantially renovated home (90%+ of interior renovated), or a home you self-built for primary residence use
- Primary residence: The home must be your or an immediate relative's primary place of residence: investment properties and rentals generally don't qualify for the buyer's rebate (they qualify for a different "rental property" rebate)
- Fair market value: For the federal rebate to fully apply, the fair market value of the property (including land) at completion must be under $450,000. For the sliding scale, between $350,000 and $450,000.
- Timing: You must apply for the rebate within 2 years of the date you take ownership or occupancy, whichever is earlier
- Individual buyer (not corporation): The rebate is for individuals: corporations buying homes for their employees generally use a different rebate stream
Substantial Renovation Rebate
If you substantially renovate an existing home (90% or more of the interior is removed and replaced), you may qualify for the same New Housing Rebate as if you'd purchased a brand-new home. The 90% threshold is the CRA's standard for "substantial renovation." Major kitchen and bathroom renovations alone typically don't qualify: the entire structure's interior must be essentially rebuilt.
📊 Chart Suggestion: "Stacked bar chart showing total HST paid vs HST rebated vs HST net cost for new homes at $300K, $400K, $500K, $600K price points in Ontario. Title: 'Ontario New Housing HST: What You Pay vs What You Get Back (2026)'"
Frequently Asked Questions
Do I pay HST on a new home in Ontario?
Yes. New homes sold by a builder in Ontario are subject to the full 13% HST on the purchase price (or fair market value if higher). However, qualified buyers can claim the GST/HST New Housing Rebate, which returns a portion of this tax. Resale homes (not newly built by a builder) are not subject to HST: only the first sale of a newly built home triggers HST.
How much is the HST rebate on a $500,000 new home in Ontario?
At $500,000 (fair market value), the federal rebate is fully phased out ($0). However, Ontario's provincial rebate still applies: 75% of the 8% provincial portion of HST = 6% of the price = $30,000 in provincial rebate alone. The total HST before rebate is $65,000 (13%); after the provincial rebate of approximately $30,000, the net HST cost is approximately $35,000.
Is there a rebate for investment properties?
Not the standard New Housing Rebate (for primary residences). However, there is a separate "GST/HST New Residential Rental Property Rebate" for builders or buyers of new rental properties if the home is rented to a long-term tenant (one-year lease). This rebate has different rates and thresholds. A tax professional can help you claim the correct rebate for your situation.
Who files for the new housing rebate: the buyer or the builder?
It depends on how your purchase agreement is structured. If the builder includes the rebate in the contract price ("rebate assigned to builder"), the builder claims it directly. If the rebate is not assigned, you as the buyer must claim it directly using CRA Form GST190 within two years of taking ownership. Always check your Agreement of Purchase and Sale for this clause.
Does the new housing rebate apply to condos?
Yes. New condominiums purchased from a builder qualify for the same GST/HST New Housing Rebate as houses, subject to the same price thresholds and eligibility requirements. The fair market value of the condo unit (not the parking spot, locker, or any other ancillary purchases) is used for the rebate calculation. Each owner in a building can claim their own rebate on their unit.
Final Thoughts
The GST/HST New Housing Rebate is one of the most valuable, and most misunderstood: tax benefits available to Canadian home buyers. In Ontario, even on a $600,000 new home, the provincial portion of the rebate alone returns close to $13,000. Make sure your purchase agreement correctly accounts for the rebate structure, file within the two-year deadline, and consult a real estate lawyer or accountant if you're uncertain. Use our Canada HST Calculator to quickly calculate the full HST on any new home purchase, and explore our HST guide for small businesses if you're purchasing a commercial property.
Sources & Citations: Content verified against official guidelines from the IRS (US), HMRC (UK), and ATO (AU). Information is reviewed for accuracy prior to publication.
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