Every new-construction sale in Ontario carries a tax conversation the buyer rarely understands and the realtor is expected to lead. New homes are subject to HST; resale homes are not. But a chunk of that HST comes back through the GST/HST New Housing Rebate - and the realtor who can quote the net-after-rebate price with confidence closes the deal the one who shrugs and says "ask your lawyer" loses.
This guide covers how the rebate actually works in Ontario, who qualifies, how it is calculated, and the handful of traps that catch buyers and agents. It is written for licensed realtors, not as tax advice - the figures here are the long-standing federal and provincial rules, and you should always confirm current thresholds with the Canada Revenue Agency and point clients to a tax professional before anyone signs.
New build vs resale: why the rebate exists at all
A resale home in Ontario does not attract HST on the purchase price. A brand-new home from a builder does - because the sale is treated as the supply of a newly produced good. In Ontario the HST is 13%: a 5% federal (GST) portion and an 8% provincial portion.
On a $700,000 new condo, 13% HST is $91,000 - a number that would make any first-time buyer walk. The rebate exists to soften that. It returns part of both the federal and provincial portions when the home is bought as a primary residence. The result is a meaningfully lower effective price, and for most builder sales the rebate is already baked into the advertised price (more on that below).
The two pieces: federal and Ontario
The rebate is really two rebates stacked on the same purchase, with different rules. Realtors trip up when they treat it as a single number.
The federal (GST) rebate. You get back 36% of the 5% federal portion - up to a maximum of $6,300 - but only on homes priced at $350,000 or less. Between $350,000 and $450,000 it phases out on a straight line, and above $450,000 the federal rebate is zero. Because almost every GTA new build clears $450,000, most Toronto-area buyers get no federal rebate at all. This $350k-$450k ceiling has not moved in decades and is the single most common source of "but I thought there was a rebate" confusion.
The Ontario (provincial) rebate. This is the one that matters in the GTA. You get back 75% of the 8% provincial portion, capped at $24,000. The cap is reached at a purchase price of $400,000 - so any new home priced at $400,000 or more gets the full $24,000, and unlike the federal piece, it does not phase out on higher-priced homes. A $500,000 condo and a $1.2M new townhouse both receive the same $24,000 Ontario rebate.
What the rebate looks like at real prices
The math is deterministic. Here is what the combined rebate works out to across a range of new-build prices for an owner-occupied home:
| New-build price | Federal rebate | Ontario rebate | Combined |
|---|---|---|---|
| $350,000 | $6,300 | $21,000 | $27,300 |
| $400,000 | $3,150 | $24,000 | $27,150 |
| $450,000 | $0 | $24,000 | $24,000 |
| $700,000 | $0 | $24,000 | $24,000 |
| $1,200,000 | $0 | $24,000 | $24,000 |
The takeaway for GTA realtors: above $450,000, the rebate is a flat $24,000, full stop. That makes it easy to quote - you do not need a calculator for a $900,000 pre-construction unit, you need to remember one number. Below $450,000 it is worth running the two formulas, because the federal piece is still in play. To put a real number in front of a client in seconds, use our Ontario HST rebate calculator.
Who actually qualifies
The rebate is for homes bought as a primary place of residence - for the buyer or an immediate family member (spouse, child, parent, sibling). Three scenarios cover most of what you will see:
- Owner-occupied, bought from a builder. The standard case. The builder almost always credits the rebate at closing and the buyer pays the net price - so the advertised price already assumes you qualify. If the buyer's circumstances mean they don't qualify (for example, it is an investment unit), the builder claws that rebate back at closing and the buyer owes it. This surprise is one of the worst conversations in pre-construction.
- Investment / rental. A buyer renting the unit out does not get the owner rebate. Instead they may claim the New Residential Rental Property (NRRP) rebate - similar amounts, but the buyer pays the full HST at closing and files to get it back afterward, with a signed lease as proof. Cash-flow-wise that is a very different closing.
- Owner-built or substantially renovated. A buyer building their own home or gutting one to the studs files the rebate directly with the CRA rather than through a builder. Different forms, different timelines.
The assignment-sale trap
Assignment sales - where a buyer sells their pre-construction contract before closing - are where HST and the rebate get genuinely complicated, and where you most need to keep your client in their lawyer's and accountant's lane. HST can apply to the assignment fee (the lift the assignor takes), and the rebate eligibility for the end buyer hinges on whether they intend to move in. The CRA has tightened reporting here in recent years. If you are working an assignment, the safe script is: "the tax treatment depends on intent and timing - let's get your accountant on this before we firm up." Do not quote a rebate number on an assignment from memory.
Recent changes: confirm before you quote
The numbers above are the durable, long-standing federal and Ontario rules - but Ottawa has been actively revisiting GST relief on new homes, including enhanced relief aimed at first-time buyers of new construction. The thresholds, price caps, and eligibility windows for these newer measures move, and some are time-limited. Because misquoting a tax incentive by even a few months or a few thousand dollars can blow up a deal, treat any "new" rebate figure as something to verify, not recite. Send clients to the current CRA rebate guidance and the Ontario government's home-buying resources for the figure that applies on their closing date.
How realtors turn this into closed deals
Buyers do not fear new construction because of the home - they fear it because of the unknowns, and HST is the biggest unknown. The agent who removes that fear wins. A few ways the rebate shows up in practice:
Quote net, not gross. When you show a pre-construction unit, lead with the price the buyer actually pays after the builder credits the rebate. "List is $749,000, and because the builder credits the HST rebate at closing for owner-occupiers, your number is the price on the page - not the price plus tax." That single sentence resolves the question every new-build buyer is silently carrying.
Flag the investor clawback early. If your buyer is even considering renting the unit out, raise the rebate clawback at the first meeting, not at closing. A buyer who finds out at the lawyer's office that they owe $24,000 they did not budget for remembers exactly which agent did not warn them.
Put the cost picture in writing. Net price, deposit structure, the rebate assumption, estimated closing costs - buyers make confident decisions when the full picture is in front of them instead of in fragments across texts and emails. Keeping that conversation organised is exactly the gap a modern real estate platform closes, so nothing important lives only in your head.
When the buyer is ready, the same clarity carries into the offer. Drafting the agreement cleanly - with the right conditions and a deposit structure the buyer understands - is the difference between a firm deal and a deal that falls apart on a financing condition. That is its own discipline; see our walkthrough of drafting an Ontario offer and never missing a condition deadline once it is signed.
Frequently asked questions
Does the HST rebate apply to resale homes? No. Resale residential homes are exempt from HST on the purchase price, so there is no HST and nothing to rebate. The rebate only applies to new or substantially renovated homes.
Is the rebate the same for a $600,000 condo and a $1.5M house? In Ontario, the provincial rebate is capped at $24,000 and does not phase out - so above $450,000, both get the same $24,000 (and no federal rebate). The price difference does not change the rebate.
Does the buyer have to do anything to get it? For an owner-occupied builder purchase, usually not - the builder credits it at closing and the buyer signs an assignment of the rebate to the builder. For rentals and owner-built homes, the buyer files with the CRA themselves.
What if the buyer changes their mind and rents it out? If they claimed the owner rebate but use the home as a rental, they may have to repay it and instead pursue the NRRP rebate. Intent at closing matters, and the CRA does audit this.
Should a realtor calculate the exact rebate for a client? You can confidently quote the Ontario $24,000 figure above $450,000 and explain the structure - but the precise, filed number, especially on assignments, owner-built homes, or anything unusual, belongs to the client's accountant. Your job is to make sure the buyer isn't blindsided, not to file their taxes.