HST Rebate for Rental Property Ontario: Federal and Provincial Shares

When you buy a new unit to rent out, the HST you pay has two parts: a federal part and a provincial part. The rental rebate gives some of each back, but the two pieces are calculated very differently.

This article explains each share, shows how the federal formula behaves as value rises, and describes how both are claimed. Your own purchase price, unit type and project may change the result, so an accountant or lawyer can confirm the numbers for you.

Two rebates, one application

The new residential rental property rebate has a federal piece and an Ontario piece. You apply directly to the CRA, because builders cannot credit the rebate. One GST524 application covers both, with Ontario schedule RC7524-ON attached, and the GST524 must be filed even if only the Ontario portion applies.

In both cases the claimant generally cannot claim an input tax credit for the tax, tax must have first become payable, and the unit must be a qualifying residential unit of the person. The CRA also looks for long-term residential use.

The federal share

The federal rebate under Excise Tax Act s. 256.2(3) is A × ($450,000 − B) ÷ $100,000. A is the lesser of $6,300 and 36% of the GST or federal HST payable on the purchase. B is the greater of $350,000 and the unit's fair market value.

In practice, this means the rebate depends heavily on value. If the unit's fair market value is $350,000 or less, B is $350,000, the fraction works out to one, and the rebate equals A. As value rises toward $450,000 the rebate shrinks gradually, and at $450,000 or more there is no federal rebate.

The Ontario share

The Ontario rebate is 75% of the provincial part, which is 8%, of the HST, up to a maximum of $24,000 per qualifying unit. It applies regardless of fair market value. That is why a higher-priced unit that gets no federal rebate may still get an Ontario one.

For leased land, such as a site in a land lease community, the cap is $7,920 per lot or site.

Projects with their own rules

The formulas above are the standard rules. Two categories work differently. For purpose-built rental housing, the federal rebate rises to 100% of the GST or federal part of HST with no phase-out thresholds, where construction begins after September 13, 2023 but before 2031 and is substantially completed before 2036. The building needs at least 4 units with a private kitchen, bath and living area, or 10 or more units, with at least 90% held for qualifying rental.

For substantial renovations, construction must begin between April 1, 2026 and March 31, 2027, be substantially completed by December 31, 2029, with tax payable by December 31, 2032 and fair market value under $1,850,000. If you are in one of these categories, do not rely on the standard formula without checking.

Claiming and timing

• A purchaser/landlord sends a statement of adjustments, the signed purchase and sale agreement (without attachments) and the rental or lease agreement.
• A builder/landlord sends the rental or lease agreement.
• The application must be filed within two years after the end of the month in which tax first became payable; otherwise no rebate is paid.
• Forms can be sent or filed online through a CRA account.

What to do next

Collect your closing documents and find the amount of GST/HST charged, the unit's fair market value and the date tax first became payable. Those three items drive the federal amount, the Ontario amount and your deadline.

Ask your accountant or lawyer to confirm the fair market value to use, whether your project falls under a special category, and whether you are the right claimant. Then file the GST524 with the Ontario schedule well inside the deadline.

Frequently asked questions