The New HST Rebate on New Homes: What It Actually Means If You're Buying Pre-Construction

If you've been sitting on the sidelines waiting for pre-construction to make sense again, this is worth five minutes of your time — there are actually two separate rebate programs stacked on new home purchases right now, and most people only know about one of them.

Between them, a qualifying buyer in Ontario can now get up to $130,000 back on a new build. That's not a rounding error. On a lot of deals it's the difference between the numbers working and not working.

Program 1: The first-time buyer rebate

This one has two halves — a federal piece and an Ontario piece — and they stack.

The federal half eliminates the 5% GST on a new home:

• Under $1,000,000 — full 5% GST eliminated. Up to $50,000 back.
• $1,000,000 to $1,500,000 — the rebate scales down. At $1.25M, roughly $25,000 back.
• Over $1,500,000 — no federal rebate.

The Ontario half covers the 8% provincial portion of the HST, worth up to $80,000, and it's retroactive to the same date.

Put together, a first-time buyer on a new build under $1M can be looking at up to $130,000 in combined relief.

The qualifying rules are strict, and this is where people get tripped up. It only applies to new construction bought from a builder — not resale. Your agreement has to be signed on or after March 20, 2025 and before 2031. And to count as a first-time buyer, neither you nor your spouse or common-law partner can have owned and lived in a home — anywhere, not just in Canada — in the current calendar year or the previous four.

That four-year lookback catches more people than you'd think. Owning a home you rented out doesn't disqualify you; living in one you owned does.

Program 2: The all-buyer window — this is the bigger story

The 2026 Ontario Budget introduced a temporary expansion that opens the same relief to everyone, not just first-time buyers.

Here's how it actually works:

• The 8% provincial portion of the HST is fully rebated, up to $80,000, on homes valued up to $1 million.
• That $80,000 maximum holds between $1 million and $1.5 million.
• Between $1.5 million and $1.85 million it reduces on a straight line, from $80,000 down to $24,000.
• Above $1.85 million, you're back to the existing $24,000 maximum.
• With the federal portion, the combined relief reaches up to $130,000.
• Open to all buyers — no first-time requirement.
• Includes new residential rental property, not just owner-occupied homes. That part is genuinely new for a rebate of this size.
• Only for agreements of purchase and sale signed between April 1, 2026 and March 31, 2027. It's a one-year window.
• Construction has to begin by December 31, 2028 and be substantially complete by December 31, 2031.

One correction worth making, because it gets repeated a lot: this is not "the full 13% HST rebated." The Ontario enhancement covers the 8% provincial portion. The federal 5% is handled separately. The headline number of $130,000 is real, but it's $80,000 provincial plus $50,000 federal, not an even split of the whole 13%.

For investors, this is the program to pay attention to. It's the first time relief at this scale has extended to rental purchases, and the window is fixed. If a pre-construction purchase is something you're weighing, the clock on this one is real.

What it looks like in real numbers

Say you're buying a new build at $800,000 as a first-time buyer. The 5% GST on that is $40,000 and the 8% provincial portion is $64,000. Under the current programs both can come back to you — a combined $104,000 that used to be a cost you simply absorbed.

At $1,200,000, the federal rebate has started phasing down but the provincial $80,000 still applies at its maximum. You're still recovering a substantial number.

At $1,700,000, the provincial rebate is partway through its reduction toward the $24,000 floor and the federal piece is gone entirely. The relief is real but much smaller, and it stops driving the decision.

The pattern is worth understanding: the programs are built to do the most work at the entry and mid-levels of the new-build market. That's exactly where most of Hamilton, Stoney Creek and Grimsby's pre-construction inventory sits.

How you actually get the money

Two routes, and which one you're on matters for your closing costs.

The builder credits it at closing. Most builders will apply the rebate directly against what you owe, so you never front the money. This is the common path and the one you want. Check your agreement — the assignment of the rebate to the builder is usually written into it.

You apply to the CRA yourself. If the builder doesn't credit it, you pay the full amount at closing and file for the rebate afterward. That means finding six figures at closing that you'll get back later, which is a very different cash-flow situation. If you're on this path, your lender needs to know early.

Either way, the paperwork has to be right. Talk to your real estate lawyer before you sign, not after.

Where people get disqualified

The rebate rules are unforgiving in a few specific places:

• The four-year lookback on first-time status. Buyers routinely assume selling a home three years ago resets them. It doesn't.
• Buying in the wrong name. Adding a parent to title to help with financing can break first-time eligibility for everyone on it. Sort the ownership structure out before you sign.
• Missing the agreement date window. Program 2 is tied to when the agreement is signed, not when you close. An agreement signed in March 2026 doesn't qualify no matter when the building finishes.
• Assignments. How a rebate travels on an assignment purchase is genuinely complicated and depends on the specific deal. Don't assume it comes with the unit.
• Primary residence intent. The first-time buyer program requires the home to be your primary residence. Buying with the plan to rent it out puts you in Program 2 territory instead.

Is it actually moving the market?

Yes — but unevenly, and this part matters if you're deciding where to put your money.

Since the rebates took effect, low-rise new home sales in the GTA have beaten their 10-year average for three months in a row — April, May, and June 2026. Builders and buyers are both pointing to the rebates as the reason.

Condos are a different story. High-rise sales have barely moved. Inventory is still high, very few new condo projects have launched this year, and overall new home sales across all product types remain well below historic norms — even with the low-rise bump.

So the honest read: the rebates are doing real work for detached, semis, and townhomes. The condo market still has its own separate problems that rebates alone can't fix yet.

What this means for you

If you're a first-time buyer, you likely qualify for Program 1 regardless of timing, and possibly Program 2 as well if your agreement falls in the right window — worth checking both.

If you're an investor, Program 2 is the one to pay attention to. It's the first time a rebate like this has extended to rental purchases, and it's only available for agreements signed in a specific 12-month window. That changes the math on new-build investment properties in a meaningful way, and it changes buyer demand and absorption on projects broadly — which affects resale and assignment potential down the road too.

At the end of the day, the rebates change the math — they don't change the fundamentals. You still need to pick the right project, the right builder, and the right unit.

Common questions

Does the rebate apply to resale homes? No. Both programs are for new construction or substantially renovated homes purchased from a builder. A resale house, however new, doesn't qualify.

Can I get both programs? They're not additive in the way people hope. The first-time buyer program and the all-buyer expansion are two routes to similar relief, and which applies depends on your status and your agreement date. The practical question is which one you fall under, not how to claim both.

I owned a home five years ago. Am I a first-time buyer? Possibly. The test is the current calendar year plus the previous four. If you sold and moved out far enough back that no year in that window includes you living in a home you owned, you can qualify. This is worth confirming precisely rather than estimating.

What if I'm buying with my spouse and only one of us has owned before? The first-time buyer test applies to both of you. If your spouse or common-law partner owned and lived in a home inside the lookback period, that generally disqualifies the purchase.

Does it apply to a pre-construction condo in Hamilton? Yes, the same rules apply — and given where downtown Hamilton pricing sits, most units land well under the $1 million threshold where the relief is at its maximum.

Is the all-buyer window going to be extended? Nobody can tell you that. It's legislated as a one-year window on agreements signed between April 1, 2026 and March 31, 2027. Planning around an extension that hasn't been announced isn't a strategy.

Do I need a lawyer for this? For a purchase this size with rebate eligibility attached, yes. The cost of getting the structure wrong is far more than the cost of the advice.

If you want, we can go through your specific situation together — I'll walk you through which program applies to you, what it actually saves, and whether the timing lines up.

Keep reading

• Pre-construction condos in downtown Hamilton, from the $250s
• Winona County in Stoney Creek — what's confirmed about Branthaven and Losani's new community
• The money side of buying: credit, mortgages and the costs nobody mentions
• The first-time buyer guide for Hamilton
• Hamilton just eliminated development charges on new homes — what it means for buyers

Call: 416-276-0052   Email: daniel@zarehhomes.com

Daniel Zareh is a licensed REALTOR® serving Hamilton, Stoney Creek, Grimsby, Burlington, Oakville and Mississauga. This is general information, not tax or legal advice. Rebate rules are detailed and change — confirm your specific eligibility with a real estate lawyer or accountant before you sign.