Buying your first newly built home in Ontario could become significantly more affordable in 2026.
New federal and Ontario HST relief measures can substantially reduce the tax payable on a qualifying new home, particularly for first-time home buyers purchasing a new home or pre-construction property.
Under the current programs, an eligible first-time buyer may benefit from:
Up to $50,000 in federal GST/HST relief
Up to $80,000 in Ontario provincial HST relief
However, there is an important detail that buyers need to understand:
You cannot simply add $50,000 + $80,000 and assume you will receive $130,000 in cash back.
The actual benefit depends on the purchase price, HST payable, existing rebates, the agreement date, the type of property and whether the buyer meets all eligibility requirements.
The New Federal First-Time Home Buyer GST/HST Rebate
The federal government has introduced the First-Time Home Buyers' GST/HST Rebate (FTHB GST/HST rebate).
For an eligible first-time buyer purchasing a qualifying new home valued at $1 million or less, the federal rebate can recover 100% of the 5% federal portion of HST, up to a maximum of $50,000.
For qualifying homes valued between $1 million and $1.5 million, the federal rebate is gradually reduced.
At $1.5 million or more, the federal first-time buyer rebate is no longer available.
The program applies to qualifying newly constructed or substantially renovated homes.
What About Ontario's 8% HST?
This is where Ontario buyers need to pay close attention.
Ontario has its own First-Time Home Buyers' Rebate, which can provide up to $80,000 of the provincial 8% portion of HST for an eligible first-time buyer.
CRA confirms that the Ontario first-time home buyers' rebate follows the federal first-time buyer eligibility conditions.
So, for a qualifying first-time buyer purchasing a qualifying new home in Ontario, there can potentially be relief on both portions of the 13% HST:
Federal portion
5% GST = up to $50,000
Ontario portion
8% HST = up to $80,000
But again, these are maximum amounts, not an automatic $130,000 cheque.
A $1 Million New Home: How Does the Calculation Work?
This is where many buyers—and even some marketing materials—can become confused.
Ontario's current temporary enhanced new housing measures can provide substantial relief on a qualifying new home.
For certain qualifying transactions, the Ontario Enhanced New Housing Rebate can provide up to $80,000 of relief on the 8% provincial portion of HST.
Ontario's temporary measures also provide additional relief equivalent to up to $50,000 of the 5% federal portion, through the Ontario New Home Affordability Payment (ONHAP).
For example, CRA illustrates a qualifying $1,000,000 new home with:
Purchase price: $1,000,000
13% HST: $130,000
The potential relief can be:
8% provincial HST: $80,000
plus
5% federal portion: $50,000
for a total potential tax relief of:
$130,000
However, the exact treatment depends on the applicable rebate programs and whether the buyer qualifies for the federal first-time buyer rebate, Ontario ENHR and/or other applicable programs.
CRA's current Ontario example specifically shows a $1 million new home with $130,000 HST and $80,000 provincial relief plus $50,000 Ontario top-up relief.
What About the $24,000 Existing Ontario Rebate?
This is one of the most important things for buyers of new construction to understand.
Historically, Ontario's regular New Housing Rebate provided up to $24,000 of relief on the provincial portion of HST.
Ontario's 2026 enhanced program can increase the available provincial relief to as much as $80,000 for qualifying homes.
The new enhanced program therefore doesn't mean that a buyer gets another $80,000 on top of an existing $80,000 rebate.
The total Ontario rebate for the 8% provincial portion is generally limited to the lesser of:
$80,000
or
the actual provincial 8% HST payable on the transaction.
This is extremely important when reviewing a builder's statement of adjustments.
Example: Why You Shouldn't Simply Add the Rebates
Suppose a builder's Agreement of Purchase and Sale shows an existing Ontario new housing rebate of $24,000.
A buyer might see:
Existing rebate: $24,000
New federal rebate: $50,000
Ontario first-time buyer rebate: $80,000
and assume:
$24,000 + $50,000 + $80,000 = $154,000
That is not the correct way to calculate the benefit.
The Ontario rebates are subject to an overall limit for the provincial 8% portion of HST. Where the Ontario FTHB rebate and Ontario ENHR both apply, the total Ontario relief cannot exceed the lesser of $80,000 or the provincial HST payable.
The federal portion also has its own rules and interaction with other federal HST rebates.
Therefore, buyers should calculate the total applicable HST and all rebates together, rather than adding every advertised maximum.
Can First-Time Buyers Get Both the Federal and Ontario Rebates?
Potentially, yes.
The CRA specifically states that the federal FTHB GST/HST rebate can apply in addition to the existing GST/HST New Housing Rebate.
Where both apply, the federal first-time buyer rebate acts as a top-up to the existing GST/HST New Housing Rebate.
For Ontario, the Ontario FTHB rebate can also interact with the Ontario Enhanced New Housing Rebate.
However, the Ontario provincial benefits remain subject to the $80,000 overall limit for the 8% provincial portion.
Who Qualifies as a First-Time Home Buyer?
The federal FTHB GST/HST rebate has specific eligibility requirements.
Generally, the buyer must:
Be at least 18 years old.
Be a Canadian citizen or permanent resident.
Purchase or build a qualifying new or substantially renovated home.
Use the home as their primary place of residence.
Be the first individual to occupy the home after construction or substantial renovation.
Meet the applicable agreement and construction deadlines.
Not have previously received the federal FTHB GST/HST rebate.
Meet the first-time buyer rules involving the buyer's previous ownership and occupancy history.
The rules also consider the buyer's spouse or common-law partner.
Therefore, someone should not assume they qualify simply because they personally have never purchased a home.
What Counts as a First-Time Buyer?
The first-time buyer test is more complicated than:
"I've never purchased a house in Canada."
The CRA rules look at whether the individual—or their spouse or common-law partner—owned and occupied a home as a principal residence during the relevant period.
This means previous home ownership outside Canada can also be relevant.
If you previously owned and lived in a home in another country, you should carefully review the CRA eligibility rules before assuming you qualify.
Does the Rebate Apply to Pre-Construction Condos?
Yes, potentially.
This is particularly important for GTA buyers.
The federal FTHB GST/HST rebate can apply to qualifying newly constructed or substantially renovated homes purchased from a builder.
The CRA currently states that, for a typical purchase of a house and land from a builder, the Agreement of Purchase and Sale must generally have been entered into:
on or after March 20, 2025 and before 2031.
Construction must begin before 2031, be substantially completed before 2036, and ownership must be transferred before 2036.
For Ontario's temporary Enhanced New Housing Rebate, different timing rules apply.
For a home purchased from a builder, the Ontario ENHR generally applies where the Agreement of Purchase and Sale was entered into:
on or after April 1, 2026 and on or before March 31, 2027, subject to the program's other requirements.
That distinction is extremely important for anyone buying a pre-construction property.
What Types of New Homes Can Qualify?
Depending on the specific program and eligibility requirements, qualifying homes can include:
New condominium units
Pre-construction condos
New townhouses
New detached homes
Semi-detached homes
Certain substantially renovated homes
Certain owner-built homes
Certain cooperative housing units
Certain mobile or modular homes
The home generally needs to be intended for use as the buyer's primary residence, subject to the specific program rules.
Does This Apply to Resale Homes?
Generally, no.
The first-time home buyer GST/HST rebate is designed for qualifying newly constructed or substantially renovated homes.
If you are purchasing an ordinary resale home from another homeowner, GST/HST generally isn't charged on the transaction in the same way as a new home purchased from a builder.
Therefore, this program is particularly important for buyers comparing:
Resale vs. New Construction
and
Resale vs. Pre-Construction
What Happens If the Builder Already Credits the Rebate?
This is very important.
If the builder agrees to pay or credit the applicable rebate to the buyer, the builder can generally submit the rebate application to CRA.
For a qualifying home purchased from a builder, the relevant federal form is generally GST190, together with the applicable Ontario schedule RC7190-ON.
The buyer normally completes and signs the applicable documentation and provides it to the builder.
If the builder does not credit a particular rebate, the buyer may, depending on the circumstances, apply directly to CRA.
CRA generally provides a two-year period from the applicable ownership or possession date for filing the rebate claim.
Be Careful With Your Builder's Statement of Adjustments
If you are buying a pre-construction home, don't look only at the purchase price.
Your lawyer's statement of adjustments may show:
Purchase price
HST
HST rebates
Builder credits
Deposits
Development charges
Other closing adjustments
The HST rebate calculation can materially affect the amount of money you need to bring to closing.
That's why it is important to understand exactly which rebate the builder has already included.
A Simple Way to Think About the HST
For an Ontario new home, HST consists of:
5% Federal Portion
This is the federal component.
The new federal FTHB GST/HST rebate can provide up to $50,000 for qualifying first-time buyers, subject to the applicable purchase-price limits and eligibility requirements.
8% Ontario Portion
This is the provincial component.
Ontario's current enhanced measures can provide up to $80,000 of relief for qualifying new homes, subject to the applicable program and timing requirements.
But these amounts must not simply be added together without considering the specific transaction.
What About Homes Between $1 Million and $1.5 Million?
The federal first-time buyer rebate is gradually reduced for qualifying homes between $1 million and $1.5 million.
Ontario's enhanced measures have different thresholds.
For Ontario ENHR:
Up to $1 million → up to $80,000 provincial relief
Over $1 million to $1.5 million → $80,000 provincial rebate
Over $1.5 million to below $1.85 million → partial provincial rebate
$1.85 million or more → the enhanced rebate is no longer available, although the regular Ontario New Housing Rebate may still be available where applicable.
This is another reason why buyers should not use a simple "13% minus rebate" calculation without looking at the actual program applicable to their transaction.
What First-Time Buyers Should Ask Before Signing
If you're considering a new home or pre-construction property in Ontario, ask the builder or your real estate professional:
1. What is the purchase price before HST?
2. How much HST is payable?
3. Which HST rebate is already included in the Agreement?
4. Is the $24,000 existing Ontario New Housing Rebate being credited?
5. Does the transaction qualify for the Ontario Enhanced New Housing Rebate?
6. Do I qualify for the federal First-Time Home Buyers' GST/HST Rebate?
7. Do I qualify for the Ontario First-Time Home Buyers' Rebate?
8. Will the builder credit the applicable rebates at closing?
9. If the builder does not credit the rebate, when and how do I apply?
10. What happens if CRA determines that I was not eligible?
These questions should ideally be answered before signing the Agreement of Purchase and Sale.
Why This Matters for GTA Buyers
For buyers in:
Brampton
Mississauga
Milton
Oakville
Burlington
Caledon
Georgetown
Vaughan
Markham
Toronto
Durham Region
the new HST rules could materially change the economics of purchasing a newly built home.
A $900,000 new home is not necessarily equivalent to a $900,000 resale home from a tax perspective.
The same is true for a $1 million pre-construction condo.
The headline purchase price is only one part of the calculation.
Buyers should look at:
Purchase Price
+ HST
− Applicable Federal Rebate
− Applicable Ontario Rebate
− Builder Credits
= Estimated Net Cost
That is the number that should be compared with alternative properties.
The $1 Million Example in Plain English
Let's put everything into perspective.
Suppose you are an eligible first-time buyer purchasing a qualifying $1 million new home in Ontario.
The HST at 13% would ordinarily be:
$130,000
The tax consists of:
5% federal portion = $50,000
8% Ontario portion = $80,000
Under the applicable 2026 programs, the potential relief can correspond to the full federal and provincial portions, subject to the precise eligibility and interaction rules.
That means the potential HST relief can be very substantial.
However, if your builder has already credited an existing rebate, you do not simply receive the same amount again.
The existing credit has to be accounted for when determining the remaining rebate available.
This is why buyers should have their lawyer or tax professional review the builder's statement of adjustments and rebate documentation.
One Important Warning About Online HST Calculators
You may see social-media videos or graphics showing calculations such as:
$1,000,000 purchase price
$24,000 HST
= $1,024,000Then calculate 13% backwards and claim a $117,000 rebate.
Be careful with these calculations.
The actual HST treatment of a new home and the interaction of the existing Ontario rebate, federal FTHB rebate and Ontario enhanced programs can be more complicated.
For example, CRA's current Ontario example uses a $1,000,000 home plus $130,000 HST, not $24,000 of total HST.
The $24,000 figure is associated with the traditional Ontario New Housing Rebate maximum, not the total HST on a $1 million new home.
Therefore, the $24,000 should not be described as "PST already added."
Ontario has HST, not PST, on these transactions.
Bottom Line
The 2026 HST changes could be a major opportunity for Ontario first-time buyers purchasing new homes.
For eligible buyers, the potential benefits include:
🇨🇦 Federal First-Time Buyer GST/HST Rebate
Up to $50,000
🍁 Ontario First-Time Buyer / Enhanced Provincial Relief
Up to $80,000 of the provincial 8% portion
Potential tax relief
Can be substantial — but the exact amount depends on the transaction.
The important thing is not to simply add the maximum rebate amounts together.
Your actual benefit depends on:
Purchase price
Amount of HST payable
First-time buyer status
Agreement date
Construction timeline
Primary-residence requirements
Existing GST/HST rebates
Ontario rebate eligibility
Whether the builder has already credited a rebate
The specific HST program applicable to your transaction
If you're considering a new home or pre-construction property in the GTA, understanding the HST rebates before you sign the Agreement of Purchase and Sale can potentially save you tens of thousands of dollars and help you budget correctly for closing.
Thinking About Buying Your First New Home in the GTA?
If you're considering a pre-construction condo, townhouse or new detached home in Brampton, Mississauga, Milton, Caledon or the Greater Toronto Area, don't look at the advertised price alone.
Ask:
"What will my net purchase price be after all applicable HST rebates and credits?"
That is the number that matters.
Disclaimer: This article is for general informational purposes only and is not legal, tax, accounting or financial advice. HST rebate eligibility depends on the specific buyer, property, Agreement of Purchase and Sale, timing and other requirements. Ontario and federal programs may change. Buyers should confirm their eligibility with the Canada Revenue Agency and obtain appropriate legal or tax advice before relying on any rebate.
Official CRA resources
CRA — First-time home buyers' GST/HST rebate
CRA — Who can apply for the FTHB GST/HST rebate