HST New Housing Rebate in Ontario: Who Qualifies and How to Claim It

Buying a newly built home in Ontario means paying HST — and for many buyers, that bill runs into tens of thousands of dollars. What a lot of purchasers do not realize until closing is that a significant portion of that tax can come back to them through the HST new housing rebate Ontario program. Miss the eligibility requirements or file incorrectly, and you lose money you were legally entitled to keep.

This article explains who qualifies for the rebate, how the federal and provincial portions work differently, what the purchase price thresholds mean in practice, and the most common errors that disqualify otherwise eligible buyers. For exact dollar amounts and current rates, always confirm with the Canada Revenue Agency (CRA) or a qualified accountant — thresholds and phase-out ranges are subject to change, and everything below reflects the rules as of writing.

A note before we start: the HST rebate sits at the intersection of tax law and real property law. Your real estate lawyer can confirm how the rebate flows through your Agreement of Purchase and Sale and whether it has been assigned to your builder. For tax advice specific to your situation, consult CRA directly or a licensed accountant.

What Is the HST New Housing Rebate?

The HST New Housing Rebate is a partial recovery of the 13% Harmonized Sales Tax paid on the purchase or self-build of a new residential property in Ontario. It has two components: a federal portion governed by the federal Excise Tax Act, and an Ontario portion governed by provincial legislation. Both portions have their own eligibility rules and their own rebate calculations, but in practice they are usually claimed together on a single CRA form.

The rebate was designed to reduce the tax burden on purchasers of new homes at modest and mid-range price points. It does not eliminate the tax — it reduces it — and it is not automatic. The buyer (or their builder, if the rebate is assigned at closing) must actively apply.

Who Qualifies: The Core Eligibility Requirements

Meeting all of the following conditions is mandatory. Falling short on even one can void the entire rebate.

1. The property must be newly constructed or substantially renovated. The rebate applies to new homes purchased from a builder, homes built by an owner-contractor, and homes that have undergone a "substantial renovation" as defined under the Excise Tax Act — generally meaning that most of the existing interior has been stripped and rebuilt.

1. You must be an individual, not a corporation. The rebate is available to natural persons only. A corporation purchasing a new home does not qualify, even if the shareholders intend to live there personally.

1. The property must be located in Canada. For Ontario buyers this is almost always satisfied automatically, but the Ontario-specific portion of the rebate applies only to Ontario properties.

1. You or a qualifying relation must intend to use the home as a primary place of residence. A "qualifying relation" includes a spouse, common-law partner, or relative. Properties purchased with the intent to rent or flip do not qualify — intent at the time of purchase is the critical moment.

1. For builder-sold properties, you must be the first individual to occupy the home (or the first to have a lease for it), and the purchase must have been a taxable transaction with the builder.

1. For owner-built homes, the owner must have constructed or substantially renovated the property and must occupy it as a primary residence upon completion.

1. The Agreement of Purchase and Sale must be signed by an individual, not by a corporation or trust acting as the purchaser.

The Federal vs. Ontario Portion Explained

The rebate has two distinct streams with meaningfully different rules.

The federal portion offsets a percentage of the 5% federal component of HST. It is graduated: the rebate percentage is highest for lower-priced homes and phases out as the purchase price rises toward a ceiling. Above that ceiling, no federal rebate is available at all. As of writing, the full federal rebate applies to homes below roughly $350,000 and phases out entirely around $450,000 — but verify both figures with CRA, as these thresholds have not been indexed to inflation and may change.

The Ontario portion works differently. It rebates a flat percentage of the 8% provincial component of HST and — crucially — does not phase out based on purchase price the same way the federal portion does. A buyer of a higher-priced home may receive no federal rebate whatsoever yet still recover the full Ontario rebate. The Ontario rebate rate is set by regulation; confirm the current percentage with CRA or your accountant before closing.

In new-home purchases from a builder, the rebate is almost always assigned to the builder at closing. The builder credits you the rebate amount against your purchase price, then claims that amount from CRA directly. Read your Agreement of Purchase and Sale carefully: if it states the price is "inclusive of HST, net of rebate," the builder is assuming you qualify. If you do not qualify — for example, because you are buying as an investment — you will owe the builder the rebate amount on closing.

Purchase Price Thresholds — What the Numbers Mean (as of writing; verify with CRA)

The relationship between purchase price and rebate entitlement generally falls into three zones:

• Below the lower threshold (approximately $350,000 as of writing): Full federal rebate available, plus the Ontario rebate.
• Between the lower and upper thresholds (approximately $350,000–$450,000 as of writing): Partial federal rebate on a sliding scale, plus the Ontario rebate.
• Above the upper threshold (approximately $450,000 as of writing): No federal rebate; Ontario rebate may still apply in full.

These federal thresholds have not been updated in many years and do not reflect the current Ontario housing market — a point of ongoing policy debate. Confirm the exact current numbers with CRA before relying on them.

How to Apply: Step-by-Step

1. Determine whether the rebate is assigned to your builder. Check your Agreement of Purchase and Sale. Most new-home contracts include an assignment clause; if yours does, the builder handles the CRA filing and credits you at closing. You still bear responsibility for meeting the eligibility requirements.

1. If the rebate is not assigned, obtain the correct CRA forms. The federal new housing rebate is claimed on Form GST190. The Ontario new housing rebate is claimed on Form RC7190-ON. Both are available from CRA.

1. Gather your supporting documents. You will typically need your Agreement of Purchase and Sale, proof of closing (transfer/deed), and evidence of primary-residence intent such as a change of address, utility setup, or occupancy permit.

1. File within the two-year deadline. The application must generally be filed within two years of the date of possession, or for owner-built homes, within two years of first occupancy. Missing this window forfeits the rebate with very limited exceptions.

1. Confirm with your lawyer at closing that the rebate assignment is correctly documented and that your closing adjustments reflect the expected credit.

1. For owner-built homes, file after you first occupy the property — not before — and retain all construction invoices, contracts, and permits.

Common Mistakes That Void the Rebate

The following errors come up often enough that they are worth naming explicitly:

• Purchasing as an investment property. Intent to rent from day one disqualifies you. CRA has challenged buyers who claimed the rebate on properties immediately listed for rent after closing.
• Corporation as purchaser. Even a single-shareholder holding company does not qualify. The purchaser on the Agreement of Purchase and Sale must be a natural person.
• Assigning the rebate when you are not eligible. If your builder credits you the rebate amount at closing and CRA later finds you ineligible, CRA recovers the amount from you — not from the builder.
• Missing the two-year filing deadline. There is no general discretion to extend this deadline. Late applications are denied.
• Co-purchaser eligibility issues. If one buyer on title does not intend to use the home as a primary residence, the eligibility of the entire claim may be affected. Get legal advice before signing if co-ownership involves a non-occupant or investor.
• Relying on the builder's assurances without reviewing the contract. The eligibility determination is yours to make. If CRA challenges the rebate, you bear the resulting liability.

Frequently asked questions