Ontario’s New HST Rebates: What Changed in 2026 and Who Gets Money Back

Between March 2025 and this spring, the federal and Ontario governments quietly rebuilt the tax math on new residential construction. If you’re a first-time buyer building a home, the HST on a build up to $1 million can now effectively disappear — worth up to $130,000. If you’re not a first-time buyer, there’s a temporary window — and it’s already ticking — where Ontario will rebate up to $80,000 of the provincial HST on a new build. And if you’re building a rental unit, including a garden suite, a parallel rental rebate now applies. Here’s the plain-language version of what changed and who it helps.

First-Time Buyers: Up to $130,000 Back

The federal First-Time Home Buyers’ GST/HST rebate became law in March 2026. It eliminates the 5% federal portion of HST on a new or substantially renovated home valued up to $1 million — up to $50,000 — with the rebate phasing out between $1 million and $1.5 million. Ontario then matched it: the province’s 2026 budget introduced a first-time buyer rebate covering the 8% provincial portion, up to $80,000. Combined, an eligible first-time buyer of a new home at or under $1 million can recover the full 13% HST.

Two details matter enormously for anyone building rather than buying. First, owner-built homes qualify — if you hire a builder to construct a home on land you own, you can claim the federal rebate directly through CRA (Form GST191) after completion, provided construction began on or after March 20, 2025. Second, “first-time buyer” has a precise meaning: you (and your spouse or common-law partner) must not have owned and lived in a home in the current calendar year or the four preceding years. That four-year lookback means some people who owned a home years ago requalify — worth checking before you assume you’re out.

Not a First-Time Buyer? The Window That Matters

This is the piece most homeowners haven’t heard about. Ontario’s 2026 budget also created a temporary enhanced rebate for all buyers and builders — not just first-timers — recovering up to $80,000 of the provincial portion of the HST on new homes. The catch is the window: it generally applies where the agreement is entered into (or construction begins) on or after April 1, 2026 and on or before March 31, 2027, with construction substantially completed by the end of 2029. If you’ve been circling a custom build or a major project that qualifies as new construction, the timing of when you sign and when shovels hit the ground now carries real tax consequences.

Building a Rental Unit? The Rebate Reaches Garden Suites

Alongside the buyer rebates, Ontario enhanced its New Residential Rental Property Rebate: up to $80,000 of the provincial HST portion per eligible rental unit, for construction beginning in the same April 2026 to March 2027 window. For homeowners weighing a garden suite or basement apartment as a long-term rental, this changes the arithmetic — a meaningful slice of the tax embedded in your construction cost comes back. We look at what it does (and doesn’t do) to the rental business case in our companion piece, Does ADU Rental Income Actually Work?

Substantial Renovations Count Too

The rebates aren’t only for ground-up builds. A substantial renovation — generally where 90% or more of the interior of a house is removed or replaced — is treated like new construction for rebate purposes. Full gut renovations of the kind done on century homes and whole-home transformations can qualify. The 90% test is technical and the stakes are five figures, so this is squarely a question for your accountant before you plan around it.

How Claiming Works

When you buy from a builder, the builder can credit eligible rebates directly at closing so you never front the money. For owner-built homes — the structure most of our custom-build clients use — you apply to CRA yourself after completion, with a two-year time limit from when construction finishes. CRA began processing the new federal claims after Royal Assent in March, and updated application forms for the enhanced Ontario rebates were expected by mid-July 2026 — so this is live now, not hypothetical.

The Honest Caveats

We’re builders, not tax professionals, and this area is genuinely technical: eligibility rules have teeth, assignment and co-ownership situations get complicated, corporations don’t qualify for the first-time rebate, and the “construction begins” date (generally when excavation starts) can decide which program you fall under. Rules can also change between when we publish and when you build. What we can do precisely is the other half: give you a fixed construction price and a schedule, so your accountant has real numbers to run the rebate math against. Verify your eligibility with a tax professional before you count on any figure here.

Related Reading

For the older rebate landscape this builds on, see Ontario HST Rebates & Development Charges. For funding the build itself, see How to Finance a Major Renovation in Ontario.