Last updated: April 30, 2026
TL;DR
On March 25, 2026, Ottawa announced a 13% HST rebate on new-construction home purchases in Ontario, eligible on deals signed after April 1, 2026. For some buyers, that's up to $130,000 in price relief.
The catch: more than a month later, neither the federal nor Ontario governments have passed the enabling legislation. The CRA has also signalled that the usual "assign-the-rebate-to-the-builder-at-closing" workaround won't fly until the law is in force.
That's left developers, realtors, mortgage brokers, and buyers operating in three different worlds at once — some pricing the rebate in, some pricing it out, some refusing to commit either way. Here's what each party needs to understand before signing anything.
What Was Actually Announced
The federal government announced on March 25, 2026 that purchases of newly-built homes in Ontario after April 1, 2026 would qualify for a full 13% HST rebate, up to a maximum of roughly $130,000 in tax relief on a qualifying home.
That's a significant expansion of the existing structure. For context, Ontario has long had a partial HST exemption on new homes priced up to $450,000, which netted most buyers about $24,000.
The new rebate is roughly 5x larger at the upper end, and it captures a much wider price band, which is meaningful in a market like the GTA where new-build pricing routinely sits well above the old threshold.
The problem is that an announcement is not a law. As of today, neither Ottawa nor Queen's Park has passed the legislation that actually makes the rebate claimable.
For background on how HST has historically applied to new-build purchases, see our explainer on HST and new construction in Ontario.
The CRA HST Rebate Wrinkle
Historically, builders priced new homes with HST included and had buyers sign over their rebate entitlement at closing. The builder claimed the rebate, applied it as a credit, and the buyer never saw a CRA form. Clean.
That mechanism is now broken, at least temporarily.
According to Leor Margulies, head of the commercial real estate group at Robins Appleby LLP, the CRA has stated that if a buyer closes before the new rebate legislation is in effect, the buyer cannot conditionally assign the rebate to the builder. They have to apply directly to CRA themselves, after the law eventually passes.
This is the same pattern that played out with the federal First-Time Home Buyer GST rebate, which was announced in March 2025 and didn't actually come into effect until March 13, 2026, almost a full year of limbo.
If the new HST rebate follows a similar timeline, every closing that happens between now and royal assent is in a grey zone.
How Developers Are Reacting
While first time buyers have shown renewed interest in pulling the trigger on new homes, most builders are splitting roughly into three approaches:
- Sticker price unchanged, rebate is the buyer's problem. This is the most common approach to-date. The purchase agreement reflects the full HST-inclusive price; the buyer is told they'll be entitled to the rebate eventually, and they're on their own to claim it.
- Discounted sticker price, with a clawback clause. Let's say a $1M home is listed at $870K, but the agreement specifies that if the rebate doesn't ultimately materialize, the buyer owes the $130K back. While it makes for lower friction at the time of signing the agreement for the sale, it is a much higher risk at closing.
- Wait and see. A small group of builders are refusing to write contracts until the legislation is clear.
The Building Industry and Land Development Association (BILDA) is also reporting that members are seeing a notable bump in sales volume since the announcement, selling more in the first 15 days of April than in the previous three months combined. The promise of relief is moving the market even before the relief is real.
What This Means for Realtors
If you're representing a buyer on a new-build deal right now, you are likely helping your clients navigate the rebate question. Three things matter:
1. Read the rebate clause before anything else. Don't assume the price is the price. The same nominal $870,000 listing can mean two completely different things depending on which of the three developer approaches above is in play. A clawback clause buried in an APS can turn a "discount" into a $130K liability at closing. Having your client's agreement reviewed by a real estate lawyer is ideal.
2. Buyers don't know what they don't know. Your job is to make sure they understand exactly what triggers the rebate and what happens if it doesn't trigger. Again, if in doubt, a few hundred dollars getting a legal opinion can save both you and your clients a lot of headaches should the rebate not materialize in the way we all expect.
3. Closing timing is now a strategic variable. If a buyer's closing date lands before the legislation passes, they're filing with CRA themselves, and given that CRA has been processing investor rebates with months-long delays, that can put your clients into a bad situation from a cashflow perspective and put your entire deal at risk.
For a deeper look at what's typically negotiable in an APS for new construction, see our piece on pre-construction Agreement of Purchase and Sale clauses every buyer should review.
What This Means for Mortgage Brokers
The rebate ambiguity directly hits affordability calculations and qualification math:
- Down payment shock. If a buyer expected the builder to absorb the rebate as a credit and the deal is structured the other way, they may need to fund the full HST out of pocket at closing, which means the client can then wait months to recoup it from CRA. That can blow up a pre-approval that was sized to the discounted number.
- Bridging the rebate gap. Some buyers will need short-term liquidity to cover the rebate amount during the CRA processing window. Worth knowing which lenders in your network have appetite for HST rebate bridge financing, and at what rates. Is the product you're offering flexible to pay down the loan once the rebate arrives?
- Conversation hygiene with buyers. A pre-approval based on assumed rebate pricing is not a pre-approval against a clawback risk. Two different conversations.
What This Means for Buyers
The biggest risk for an individual buyer right now isn't the policy itself. It's the gap between the marketing of the policy and how it actually works at the closing table.
Practical questions to ask before signing anything:
- Is the listed price HST-inclusive or HST-exclusive?
- If discounted, is there a clause making me liable if the rebate doesn't apply?
- Who is responsible for filing the rebate claim — me or the builder?
- What happens if my closing date lands before the legislation passes?
- If I have to file with CRA directly, do I have the cash flow to cover months of processing time?
The rebate is real in the sense that the political commitment is there. It is not real in the sense that you can't assume it as a guaranteed line item in your financing plan today.
Run the numbers before you negotiate.
Our free FTHB Rebate Tool lets you plug in a purchase price and see exactly what you'd be entitled to under the federal First-Time Home Buyer GST rebate, the new Ontario HST rebate (when enacted), and how they stack. It's the fastest way to know whether a builder's "discounted" price actually reflects the rebate you'd qualify for — or whether you're being asked to absorb a clawback risk that wipes out the discount.
FAQ
When does the HST rebate actually take effect?
The eligibility date is April 1, 2026, but the rebate cannot actually be claimed until both federal and provincial enabling legislation has passed and received royal assent. As of April 30, 2026, that legislation has not been tabled in final form.
Can I still buy a new home today and get the rebate later?
Yes — eligibility runs from purchases made after April 1, 2026. But you may have to apply to CRA yourself after the law is in force, rather than having the builder credit it at closing.
What's the maximum rebate?
Up to roughly $130,000 in HST relief on qualifying new-construction purchases. Actual amount depends on the purchase price and the final rules.
Is the rebate available to investors?
Investors purchasing new builds as rental properties have always had to apply to CRA directly. That's expected to continue, with even more scrutiny given the larger dollar amounts.
What's the risk if I sign a discounted-price contract now?
Many of those contracts include a clawback clause: if the rebate ultimately doesn't apply to your purchase, you owe the difference. Read the agreement carefully before signing.
How does this interact with the federal First-Time Home Buyer GST rebate?
The First-Time Home Buyer rebate (5% of purchases up to $1M, with a sliding scale up to $1.5M) came into effect on March 13, 2026. It's a separate program but worth checking eligibility for in combination with the new HST rebate.
The Bottom Line
The Ontario HST rebate is one of the most consequential pieces of housing policy of the past decade — if it lands. Right now it's stuck in the gap between announcement and enactment, and that gap is where deals are being negotiated, contracts signed, and closings scheduled.
For everyone in the transaction chain, the message is the same: don't price in something the law hasn't priced in yet. Read the clauses. Document the assumptions. And build in the time it will take CRA to actually process whatever ends up getting claimed.
When the legislation does pass, we'll update this post.
Run the Numbers on Your Client's Deal
Before you sign anything or advise a client to model what the rebate actually means in dollars. Our FTHB Rebate Tool calculates your eligible federal and provincial rebate amounts in seconds, based on the latest 2026 program rules. Free, no sign-up, built for Ontario buyers and the professionals who serve them.
Have a closing in flight that's affected by this? Deeded handles new-construction closings across Ontario, B.C., and Alberta, and our team is tracking the rebate situation as it develops. Get in touch.
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