The GST/HST New Housing Rebate: Who Qualifies and How Much Is Actually Recoverable

There is no single “new housing rebate” in Ontario. There are three, they are calculated on different bases, they have different eligibility conditions, and a buyer can qualify for one and not the others. Builders routinely quote a price “net of rebate” without specifying which rebate, and purchasers routinely sign an assignment of the rebate they were never entitled to in the first place.

This is what each one actually does.

The original federal rebate is largely irrelevant in Ottawa now

The long-standing GST/HST new housing rebate refunds 36% of the GST, or the federal part of the HST, to a maximum of $6,300. The full amount is available only where the fair market value of the house is $350,000 or less. Between $350,000 and $450,000 it grinds down, and at $450,000 or more it is gone entirely.

Those thresholds have not moved in a very long time. In practice almost no new detached home or condominium in the Ottawa market qualifies for a dollar of it, which is easier to see once you know where Ottawa’s actual price numbers come from rather than working from a national average. The rule is set out in the CRA’s new housing rebate guide.

It still matters in two situations: a modest owner-built home outside the city, and the fact that eligibility for the federal rebate is a precondition for some provincial relief. Do not dismiss it without checking.

The first-time home buyers’ GST rebate is the significant one

This is the measure that changed the arithmetic for new construction.

The first-time home buyers’ (FTHB) GST/HST rebate refunds up to $50,000 of the GST, or the federal part of the HST, on a new home. It eliminates that tax entirely on a home valued up to $1 million, and phases out linearly between $1 million and $1.5 million. At $1.5 million and above there is nothing.

The phase-out is proportional, not cliff-edged. A home at the midpoint of the range recovers roughly half the maximum.

The timing conditions are strict and they are where deals fail:

• For a house purchased from a builder, the agreement of purchase and sale must have been entered into on or after 20 March 2025 and before 2031, and construction must be substantially completed before 2036
• For an owner-built house, construction or substantial renovation must begin on or after 20 March 2025 and before 2031

The eligibility conditions are on the CRA’s FTHB rebate pages. “First-time” carries a specific meaning here, and it is tested against both you and your spouse or common-law partner. A buyer who owned a home five years ago, or whose partner did, needs to read the definition rather than assume.

Ontario adds its own layer

Ontario’s HST has an 8% provincial component, and the province rebates part of it separately.

The standing Ontario new housing rebate is 75% of the provincial part of the HST, to a maximum of $24,000. Critically, it is available even where the fair market value is $450,000 or more, which is why it is the only rebate most Ottawa buyers of a new build ever see.

On top of that there is a temporary Ontario enhanced new housing rebate, which raises the ceiling on the provincial part to $80,000 and is generally available where the agreement of purchase and sale with the builder is entered into between 1 April 2026 and 31 March 2027. The structure runs full relief on the provincial part up to $1 million of value, a flat maximum between $1 million and $1.5 million, a partial amount from $1.5 million to $1.85 million, and a fall back to the ordinary $24,000 above that. The conditions are in GST/HST Notice 346.

Because it is temporary and keyed to the date of the agreement, the date you sign matters more than the date you close.

The three rebates side by side

The condition every rebate shares

All of them require that the house be acquired for use as the primary place of residence of the purchaser or a relation, and that the purchaser or a relation be the first individual to occupy it.

That single requirement is responsible for most denied claims. It fails when:

• A parent is added to title purely to satisfy a lender, and never occupies the home. Every person on title generally has to meet the conditions
• The buyer’s intention at the time of the agreement was to rent the unit out. Intention is tested at the time of purchase, and the CRA looks at what you actually did with the property
• The unit is bought as an investment. That is not a rebate failure, it is a different rebate: the new residential rental property rebate, which you must claim yourself rather than receive as a credit from the builder

If a rental unit was bought expecting the new housing rebate, the builder’s credit is usually reversed and the CRA assesses the purchaser for it. The rental rebate may still be available, with its own thresholds and its own filing deadline. That is a recoverable situation, but only if it is caught.

Which rebate applies to you

Is the home new or substantially renovated?
  |
  +-- No ......................... No new housing rebate. Resale housing
  |                                is generally not subject to GST/HST
  |
  +-- Yes
        |
        Will you or a relation live in it as a primary residence?
          |
          +-- No ................... Consider the new residential rental
          |                          property rebate instead
          |
          +-- Yes
                |
                Are you a first-time buyer, with an agreement dated
                on or after 20 March 2025?
                  |
                  +-- Yes .......... FTHB GST rebate up to $50,000
                  |                  PLUS the Ontario rebate
                  |
                  +-- No ........... Federal rebate only if FMV is
                                     under $450,000, PLUS the Ontario
                                     rebate in either case

Filing mechanics that cost people money

The builder usually credits the rebate at closing on a purchase from a builder, and you sign the application as part of the closing package. Read what you are signing. If the conditions later fail, the CRA assesses you, not the builder.

On an owner-built home you claim it yourself, and the calculation runs off the fair market value at substantial completion, not what you spent. If you built efficiently and the finished value exceeds the threshold, you can lose a rebate you would have received had the same house cost more to build.

There is a filing deadline, generally two years, and it runs from a date that depends on how the house was acquired. Missing it is fatal. The CRA has no discretion to accept a rebate application filed out of time.

Assignment sales are their own problem. An assignor is generally not the first occupant and is generally not eligible. An assignment can also make the assignor a builder for GST/HST purposes, with a collection obligation on the assignment fee. If you are assigning a pre-construction contract, deal with this before closing, not after. The related income tax question is covered in flipping property.

Keep the paperwork

Keep the agreement of purchase and sale with its date, the statement of adjustments, every amendment, occupancy documentation, and for an owner-built home every invoice plus an appraisal at substantial completion. Rebate audits happen years later, and they are documentary.

Two further points worth knowing. Claiming a rebate does nothing to your principal residence status, which is governed separately and explained in the principal residence exemption. And if you later convert the home to a rental, that is a change of use with its own income tax consequences, entirely apart from the rebate. New buyers should also review the other credits available on a first home, several of which are claimed on the income tax return rather than at closing.

If you are buying pre-construction, or you have been told a rebate was assigned to the builder and you are not sure which one, send me the agreement and the statement of adjustments before you close. It is far cheaper to fix the eligibility question then than to answer a CRA assessment two years later.