Ontario homebuyers have been hearing the same number for a week now: $130,000. That’s the maximum HST rebate available on qualifying new homes as of April 1, 2026. It’s a staggering figure and it’s generating a lot of questions. The most common one I’m getting from clients: “Do I pay the full price and get money back later? Or does this actually lower what I pay?”. The answer isn’t as complicated as it sounds. But it does depend on how your purchase is structured. Let’s cut through the noise.

What Changed on April 1, 2026

Every new home sold in Ontario is subject to 13% HST – a combined 5% federal (GST) and 8% provincial sales tax. That tax has always applied, and various rebate programs have existed to soften the blow. But those programs were limited: capped at $24,000 provincially, restricted to certain price points, and (until recently) available only to first-time buyers for the more generous federal relief.

On March 25, 2026, Premier Doug Ford announced a “temporary, one-year expansion” that changes the math dramatically. The province and federal government are now partnering to rebate the full 13% HST on qualifying new homes up to $1 million and substantial relief above that.

The Numbers at a Glance

• $130,000 — Maximum rebate (combined federal + provincial)
• 13% — Full HST rebated on homes up to $1M
• 1 Year — April 1, 2026 to March 31, 2027
• All Buyers — Not limited to first-time purchasers

This is the single most significant tax change for Ontario’s new-home market in over a decade. The province estimates it could stimulate an additional 8,000 housing starts and support up to 21,000 jobs.

The Question Everyone Asks: How Does This Actually Work at Closing?

This is where the confusion lives and it’s a fair question. If a home is listed at $800,000, does the buyer write a cheque for $904,000 (price + 13% HST) and then wait months for a $104,000 refund from CRA?

In most cases, no. Here’s what typically happens…

Scenario 1: Builder Assignment (The Standard): When you buy a new home or condo from a builder, the Agreement of Purchase and Sale almost always includes a clause where you assign the HST rebate to the builder. The builder then factors that rebate into the advertised purchase price. This means the sticker price you see already reflects the rebate. You don’t pay the full HST out of pocket and wait for it back. The savings are baked in from the start. At closing, your Statement of Adjustments will show the HST charged and the rebate credited – they net out. You pay the agreed purchase price, and the builder handles the rebate paperwork with CRA on your behalf.

Scenario 2: Buyer Applies Directly (Less Common): If the builder does not assign the rebate into the purchase price, or if you’re building a home on your own land, you would pay the HST and then apply to CRA for the rebate yourself after closing. In this case, yes, you get money back after the fact. The CRA processing time typically ranges from four weeks to six months.

What About Your Down Payment?

Because the rebate is usually assigned to the builder and reflected in the purchase price, it indirectly helps with affordability as a lower purchase price means a smaller mortgage, which means less cash needed upfront. But the rebate itself isn’t deposited into your bank account to top up your down payment. It lowers the price you’re financing.

Who Qualifies

The expanded rebate is broader than any previous HST relief program in Ontario. Here’s who’s eligible:

• First-time buyers purchasing a new home as their primary residence
• Repeat buyers purchasing a new home as their primary residence (or for a close relative)
• Investors purchasing a new home to rent out as a long-term residential rental property
• Buyers of newly constructed detached, semi-detached, townhouses, row houses, and condo units
• Buyers of substantially renovated homes (where at least 90% of the interior has been replaced)

Key Conditions

1. Purchase agreement must be signed between April 1, 2026 and March 31, 2027
2. Construction must begin by December 31, 2028
3. Construction must be substantially completed by December 31, 2031
4. The home must be used as a primary residence or long-term rental (not a flip or short-term rental)

Important Note on Pre-Construction

If you signed a purchase agreement before April 1, 2026, the expanded rebate does NOT apply to your purchase even if you close after that date. The agreement signing date is what matters. The old rebate rules (max $24,000 provincial) apply to earlier agreements. First-time buyers, however, may still qualify for the separate FTHB GST/HST rebate with an effective date of March 20, 2025.

What This Looks Like in Practice

Consider a new-build townhouse in the GTA listed at $875,000. Under the old rules, you’d receive a maximum provincial rebate of $24,000 – possibly up to $30,000 – combined with the federal portion. Under the new program, the full 13% HST is rebated. That’s $113,750 in tax that effectively disappears from the transaction. For a $1.2 million detached home, you’d receive the maximum $130,000 rebate which is still significant, though the remaining HST above that becomes part of your cost.

What This Does Not Apply To

A few critical exclusions worth noting:

• Resale homes are not subject to HST in the first place, so this program is irrelevant to a standard resale purchase
• Cottages, vacation properties, and secondary residences don’t qualify as the home must be a primary residence or a long-term rental
• Short-term rental properties (Airbnb-style) are not eligible
• Assignments of purchase agreements may have different rules so consult your lawyer

Frequently Asked Questions

Do I get a cheque from the government after closing? Usually not. In most builder purchases, the rebate is assigned to the builder and reflected in the purchase price you pay at closing. If the builder doesn’t assign the rebate, you can apply directly to CRA and receive a refund  but this is less common.

Does the rebate increase my down payment? Not directly. Because it lowers the effective purchase price (when assigned to the builder), it reduces the amount you need to finance which indirectly means you may need less cash at closing. But the rebate doesn’t show up as cash in your account to put toward a down payment.

I’m not a first-time buyer. Do I still qualify? Yes. The expanded 2026 program is available to all buyers, first-time and repeat, as long as the home is new construction (or substantially renovated) and will be used as a primary residence or long-term rental.

I signed my purchase agreement in February 2026. Am I eligible? Not for the expanded rebate. The agreement must be signed on or after April 1, 2026. However, if you’re a first-time buyer, you may qualify for the separate FTHB rebate that has an earlier effective date of March 20, 2025.

Does this apply to condos that haven’t been built yet? Yes! Pre-construction condos qualify, provided the purchase agreement is signed within the eligible window and construction timelines are met. This is particularly relevant for the pre-construction market, where units may not be completed for several years.

What happens if the federal legislation doesn’t pass? The full 13% rebate depends on federal regulatory amendments covering the 5% GST portion. Ontario has committed to the 8% provincial portion regardless. If federal legislation is delayed, buyers would still receive up to $80,000 in provincial relief on homes up to $1 million.

If I saw a new build listed for $1,250,000 last month, is it less expensive today? Maybe but not necessarily in the way you think. In most cases, that $1,250,000 price already included the standard HST rebate. That means:

• You were already getting a tax break
• You were not paying extra HST on top
• The price you saw was the real price

So if nothing else changed, the home is still effectively $1,250,000 today.

So where do the “new savings” come in? Recent changes and proposals may introduce additional rebates, especially for certain buyers. If you qualify, you could see extra savings on top of what was already built into the price. For a $1,250,000 home, that additional benefit could be approximately $20,000$30,000 in extra savings

Does that mean the new price is $1,220,000–$1,230,000? Effectively yes but not always visibly. There are two ways this typically shows up:

1. Price reduction: 
   The builder adjusts the list price downward
2. Closing adjustment: The price stays at $1,250,000, but you receive the benefit through credits or adjustments on closing

Am I getting a cheque back after I buy? No. This is not money you receive in your bank account. It is a reduction in your overall cost, not cash in hand.

Thinking About a New Build in Ontario? This is a one-year window. If you’ve been waiting for the right moment to buy new construction, the math just changed significantly. Let’s look at your numbers together.