Quick answer
What this means in practice
There is not one universal 13% HST exemption for every Ontario new-home buyer. The current landscape combines an enacted federal first-time home buyers' GST/HST rebate, the existing new-housing rebate rules, and separate Ontario provincial relief with its own status, dates, and eligibility.
Key takeaways
- The federal first-time home buyers' rebate can eliminate the federal GST on eligible new homes up to $1 million and provide partial relief between $1 million and $1.5 million.
- The federal first-time buyer measure received Royal Assent and CRA is accepting applications.
- Ontario provincial relief is a separate measure with separate eligibility and effective dates; it should not be described as a blanket 13% exemption.
- Builder pricing may include an assigned rebate, so buyers must read the agreement and statement of adjustments.
The purchase agreement, buyer status, occupancy, price, construction dates, and whether the builder credits a rebate can all change the result. Confirm the exact program with the builder, real-estate lawyer, and tax adviser before treating a rebate as closing cash.
Start by separating the rebate programs
The 13% Ontario HST contains a 5% federal part and an 8% provincial part. Federal and provincial rebate rules do not automatically move together. The enacted federal first-time home buyers' rebate addresses the federal GST portion. Existing federal and Ontario new-housing rebates continue to have their own rules, and Ontario announced temporary enhanced provincial relief in its 2026 budget.
Use the CRA program pages for the current legal and administrative status. Avoid applying one program's price limit, buyer definition, or agreement date to another.
Federal first-time home buyers GST/HST rebate
The federal rebate can provide full relief from the 5% GST, or federal part of HST, on an eligible new home valued up to $1 million and partial relief between $1 million and $1.5 million. The maximum federal rebate is $50,000. It generally applies to qualifying agreements entered into on or after March 20, 2025 and before 2031, with additional construction and completion deadlines.
First-time buyer status, age, residency, occupancy, property, and transaction requirements apply. CRA's current page and forms should be checked for the complete test.
Existing GST/HST new housing rebates
Separate new-housing rebates may apply when an individual buys a new or substantially renovated home from a builder, builds a home, or substantially renovates one for use as a primary place of residence, provided the detailed conditions are met. Ontario can also provide a provincial new-housing rebate under its rules.
These programs are not limited to the headline federal first-time buyer measure, and they do not produce the same amount in every transaction.
Ontario temporary enhanced relief
Ontario's March 2026 budget proposed temporary relief from the 8% provincial part of HST for eligible new housing. CRA's new-housing page tracks the measure and links to the applicable situations and implementation details. The provincial measure has its own agreement window and conditions, including distinctions between first-time and other buyers.
Because implementation can change, verify the current CRA and Ontario guidance on the date the agreement is signed and again before closing.
Builder credit versus buyer application
A builder may credit an eligible rebate at closing and have the buyer assign it to the builder. If the builder does not credit it, an eligible buyer may need to apply directly using the correct CRA form. The agreement should state whether the advertised price includes HST, assumes assignment of a rebate, or requires the buyer to pay an amount back if CRA later denies the claim.
That clause can materially change closing cash. Have the real-estate lawyer review it before the financing condition is removed.
Documents and dates to verify
- Date the agreement of purchase and sale was entered into
- Construction start and substantial-completion dates
- Purchase price or fair market value used by the program
- First-time buyer, age, residency, and occupancy tests
- Whether the builder is crediting and receiving an assignment of the rebate
- Required CRA form and filing deadline
- Supporting invoices and occupancy evidence that must be retained
Rental and investment purchases
A home acquired primarily for long-term rental may fall under the GST/HST new residential rental property rebate rather than the owner-occupied new-housing rules. Short-term rental, mixed use, a corporation as buyer, or a change in occupancy can alter eligibility.
The mortgage approval and tax treatment are separate reviews. A lender accepting projected rent does not establish rebate eligibility.
How to budget safely before closing
Model the purchase without depending on an uncertain rebate, then show the rebate as a separate verified credit only when the agreement and professional advice support it. Include land transfer tax, legal fees, adjustments, development or occupancy charges, insurance, and any HST amount not credited by the builder.
For a pre-construction purchase, recheck both financing and tax rules well before occupancy and final closing because the buyer's circumstances and program guidance can change during a long build period.
