Buyers and builders of new homes in Ontario have spent the spring tracking a moving target: headlines promised HST relief of up to $130,000, but the legislation and regulations lagged the press releases. That gap has now closed. With the final regulations registered in June, all three rebate programs are in force: the federal First-Time Home Buyers’ rebate, the Ontario First-Time Home Buyers’ rebate, and the enhanced rebate available to all buyers of new homes. This is a plain-language map of the three, and what they mean in practice.

1.   The Federal First-Time Home Buyers’ GST Rebate

What it is. A rebate of the full 5% federal GST (the federal portion of the HST) on a new home bought by a first-time buyer, to a maximum of $50,000.

The law and who qualifies. Enacted by the Making Life More Affordable for Canadians Act (Bill C-4, Royal Assent March 12, 2026), which adds first-time-buyer provisions to the Excise Tax Act (ss. 254(2.1), 254.1(2.1), 255(2.1) and 256(2.1), depending on how the home is acquired). The buyer must be a first-time home buyer acquiring the home as their primary place of residence; the agreement of purchase and sale must be signed on or after March 20, 2025. The full rebate is available on homes valued up to $1 million, reduced on a sliding scale between $1 million and $1.5 million, and unavailable at or above $1.5 million. The CRA has accepted applications since March 2026.

2.   The Ontario First-Time Home Buyers’ HST Rebate

What it is. Ontario’s mirror program: a rebate of the full 8% provincial portion of the HST on a new home bought by a first-time buyer, to a maximum of $80,000. Stacked on the federal rebate, it can bring combined relief to $130,000.

The law. Implemented by SOR/2026-94, made under sections 277 and 277.1 of the Excise Tax Act and amending the New Harmonized Value-added Tax System Regulations, No. 2. An Ontario rebate is delivered by federal regulation because the provincial portion of the HST is administered federally by the CRA under the Canada-Ontario tax coordination framework. The operative provision is section 256.21(1), with the first-time-buyer top-ups added at sections 41(2.1), 43(1.1), 45(2.1) and 46(2.1) of the regulation, tracking the four ways a new home can be acquired (from a builder, building-with-leased-land, a co-operative share, or owner-built).

Who qualifies and how much. Eligibility deliberately mirrors the federal rebate: if you qualify federally, you qualify provincially. The full 8% applies up to $1 million, then phases down between $1 million and $1.5 million on the same scale as the federal rebate, with a $24,000 floor for homes valued between $1.35 million and $1.5 million, so a first-time buyer is never left worse off than under Ontario’s existing New Housing Rebate. The new rebate tops up rather than duplicates the legacy rebate: the formulas subtract any legacy New Housing Rebate already claimed, and total provincial relief is capped at $80,000.

Status. Live and retroactive to March 20, 2025 (section 8(1)). The CRA opened applications on June 5, 2026 with a revised Ontario rebate schedule. Where a buyer also qualifies for the enhanced rebate, the two can be combined, but 8% relief remains capped at $80,000.

3.   The Expanded HST Rebate For All Buyers

What it is. The “$130,000 for all buyers” measure from Ontario’s 2026 Budget. Unlike the first-time-buyer rebate, it is open to all buyers of qualifying new homes for agreements signed between April 1, 2026 and March 31, 2027. It rebates the full 8% provincial portion (up to $80,000) plus an amount equivalent to the 5% federal portion (up to $50,000), for combined relief of up to $130,000.

Who qualifies and how much. Eligibility otherwise tracks Ontario’s existing New Housing Rebate, with added timing conditions reflecting the temporary nature of the measure: construction must begin before 2029 and be substantially completed before 2032. The full 8% applies on homes up to $1 million; the $80,000 maximum then holds flat to $1.5 million, declines linearly between $1.5 million and $1.85 million, and reverts to the existing $24,000 at or above $1.85 million.

The law. The 8% provincial portion is implemented federally, by P.C. 2026-610 (amending the New Harmonized Value-added Tax System Regulations, No. 2; made June 12, 2026 and deemed in force April 1, 2026), which adds the additional rebate at new subsections 41(2.01), 43(1.01), 45(2.01) and 46(2.01), with parallel provisions in section 47 for new rental and co-op housing. The 5% portion is a separate payment made by Ontario, under O. Reg. 196/26 (made under section 51.2 of the Retail Sales Tax Act and in force April 1, 2026): a buyer who has received the federal 8% enhanced rebate is entitled to an Ontario payment equal to that rebate multiplied by 5/8 (the 5% equivalent), reduced by any federal rebate received and capped at $50,000.

Status. In force, deemed effective April 1, 2026. The CRA’s updated application forms, however, are not expected until mid-July 2026, so the enhanced rebate cannot yet be filed. As explained under “For builders and developers” below, that does not prevent a builder from crediting the rebate at closing, but it governs when the rebate can be recovered. Note that there is inherent risk in crediting a rebate that cannot yet be claimed, and taking on this risk is a business decision weighing the potential risks against the benefits.

Rental Housing and Student Residences

The enhanced rebate is not limited to owner-occupiers. The same June regulations extend it to new purpose-built rental housing through the New Residential Rental Property Rebate, so investors and landlords building or buying qualifying long-term rental housing in the window can access the enhanced 8% rebate and the 5% top-up on the same value scale, subject to their own construction-timing conditions. Separately, SOR/2026-94 extended the provincial Enhanced HST Rental Rebate so that universities, public colleges and school authorities can claim equivalent relief on new student-housing projects in Ontario and the other HST provinces.

The Practical Upshot

For first-time buyers. You can claim both the federal and Ontario portions, for combined relief of up to $130,000. Because the Ontario rebate is retroactive to March 20, 2025, buyers who already closed within that window (and who claimed only the legacy rebate or only the federal rebate) can go back and claim the Ontario top-up. Relief cannot exceed the maximums (legacy amounts are netted out), and applications must be filed within two years of the transfer of ownership or possession.

For all other buyers. Substantial relief is now available: up to $130,000, being $80,000 of the provincial portion plus up to $50,000 from Ontario as the 5% top-up — provided the agreement of purchase and sale is signed in the April 1, 2026 to March 31, 2027 window and the construction-timing conditions are met. The 5% arrives as a separate payment from Ontario, with an expected service time of about 30 days.

For builders and developers. Timing matters. A builder can credit the rebate, including the enhanced rebate, to the purchaser at closing under section 256.21(3) of the Excise Tax Act and section 4(3) of O. Reg. 196/26. A builder recovers the 8% by claiming a deduction on the GST/HST return for the reporting period in which the rebate was credited, and that return must be supported by the filed rebate schedule. Because the HST on a sale is remitted on the return for the period in which it becomes payable, the practical question on any deal is simply whether the updated forms are available before that return is due. For a June closing by a monthly filer (return due July 31), the forms (expected mid-July) should be in hand in time, so the builder can credit at closing and offset the rebate on the same return without ever fronting the tax. The narrow risk is a filer whose return falls due before the forms issue, or a slip in the mid-July estimate, in which case the builder fronts the credited amount for a single filing cycle and recovers it on a later return.

Two further mechanics for builders. The 5% top-up cannot be deducted on the GST/HST return; Ontario reimburses it separately (the purchaser can assign it to the builder, and the updated GST190 carries the purchaser’s consent to share contact, banking and rebate information with Ontario, which triggers the payment), so plan for that lag. And because builder and purchaser are jointly and severally liable to repay a rebate credited to a buyer who turns out not to qualify, the agreement of purchase and sale should carry purchaser eligibility representations and an indemnity. Finally, be alert to the anti-avoidance rules: a pre-April-2026 agreement that is restructured or re-signed is deemed to fall outside the enhanced-rebate timing window.

Which form do I use?

The rebates are claimed on the federal application, with an Ontario schedule attached to capture the provincial portion:

  • New home purchased from a builder: federal Form GST190, with the RC7190-ON Ontario rebate schedule (revised June 2026 to add the first-time-buyer calculation).
  • Owner-built home: federal Form GST191, with the RC7191-ON schedule.
  • Purpose-built rental: federal Form GST524, with the corresponding Ontario rental schedule (RC7524-ON).

The RC7190-ON is being updated again (expected mid-July 2026) to add the enhanced-rebate calculation and the purchaser’s Ontario information-sharing consent. There is no separate form for the 5%: it flows from the same GST190 package. If the builder pays or credits the rebate, the builder files the GST190 and the schedule with the CRA; otherwise, the buyer files directly with supporting documentation.

 

Written by: Jesse Summers, Summer Law Student, SV Law



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