Buying a new-build home in Ontario means paying HST, 13% on top of an already large number. The good news: between the federal and Ontario new-housing rebates, a substantial portion of that tax can come back to you, and 2026's enhanced rebate program pushes the potential recovery up to $130,000 on qualifying homes.
How the rebate works
The rebate has two components. The Ontario portion rebates 75% of the provincial part of HST (8%) up to a cap, and the federal portion rebates part of the 5% GST, phasing out as prices rise. The enhanced 2026 program extends relief further up the price curve, but it hard-stops at $1.5 million. Cross that line and the enhanced rebate disappears entirely, which creates a real cliff for buyers shopping near that number.
Who qualifies
- You're buying a newly built or substantially renovated home from a builder, or building on land you own.
- The home will be your (or an immediate family member's) primary residence, investor purchases follow different rules through the rental-property rebate.
- Applications must be filed within two years of closing. Miss the deadline and the money is gone.
Builder-included vs. buyer-claimed
Most builders price homes 'net of rebate', they claim it and you assign them the right. Read your purchase agreement carefully: if you don't qualify (say, the home won't be your primary residence), the builder can come after you for the rebate amount after closing. That's a five-figure surprise nobody wants.
What it means for your mortgage
The rebate arrives after closing, but your mortgage is based on the full purchase price you pay on closing day. Smart structuring, bridge amounts, prepayment room to apply the rebate against principal when it lands, turns the rebate into a genuine reduction of your borrowing cost rather than found money that gets absorbed into renovations.
If you're buying new construction this year, let's run the numbers before you sign. The rebate rules, the price cliff and your mortgage structure are all one conversation.
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