- The HST on a new rental purchase has a federal part and an 8% Ontario part, and each has its own rebate.
- The Ontario rebates can reach up to 100% of the 8% provincial part, with a general combined maximum of $80,000 for a lease of building and land.
- The rebate is claimed on Form GST524, generally within two years after the end of the month in which tax first becomes payable.
If you buy a newly built or substantially renovated property to rent out, the HST on the purchase price can be a large cost. Part of that tax may come back to you through rebates, and the federal and Ontario pieces work differently.
This article explains in plain terms how the two parts are calculated and capped, and where the rules are still shifting. Your exact rebate depends on your contract, the unit's value and the timing of construction, so treat this as a map and not a calculation.
Two taxes, two rebates
In Ontario, HST is made up of a federal part and a provincial part. The provincial part is 8%. The federal New Residential Rental Property (NRRP) rebate lets a landlord who bought a newly built or substantially renovated rental property recover part of the GST or the federal part of the HST.
Ontario has its own rebate of part of the 8% provincial part. It is subject to a maximum amount. NRRP rebates are claimed on Form GST524. How the two rebates fit together for your purchase depends on your facts, so it is worth confirming with a lawyer or accountant.
How the federal part works
The federal rebate recovers only part of the federal tax, and it phases out as the unit's fair market value (FMV) rises. No federal rebate is available for a unit with an FMV of $450,000 or more.
Because the phase-out and the exact percentages are set by the CRA and can be updated, check the current CRA guide for the rebate before you run numbers. A lawyer or accountant can confirm which figures apply to your purchase.
How the Ontario part works
The Ontario NRRP rebate is available whatever the unit's FMV. You can claim it even where the federal rebate is unavailable only because the FMV is $450,000 or more.
The Ontario enhanced rebate (Ontario ENRRP) works together with it. Combined, they can give a rebate of up to 100% of the 8% provincial part of the HST. For a lease of building and land, the combined maximum is generally $80,000.
High-value units are treated differently. The Ontario ENRRP is gradually reduced for units with an FMV over $1.5 million and under $1.85 million, and none is available at $1.85 million or more.
Quick comparison
| Rebate | Key limit |
|---|---|
| Federal NRRP | None for a unit with an FMV of $450,000 or more |
| Ontario NRRP | Subject to a maximum; available whatever the FMV |
| Ontario ENRRP (with Ontario NRRP) | Up to 100% of the 8% part; generally $80,000 combined for building and land; reduced from $1.5 million, none at $1.85 million or more |
Ontario rental HST relief has been changing. The Ontario ENRRP depends on when construction started, and further provincial relief for new rental housing has been proposed. Always confirm the version of the rules that applies to your project.
Conditions, forms and timing
The NRRP rebate requires the unit's first use to be as a primary place of residence for at least one year. That can be the tenant's, or the owner's or a relation's, or an equivalent period for certain other arrangements.
You claim on Form GST524, with Form GST525 for co-op and multiple units. A purchaser-landlord must apply within two years after the end of the month in which tax first becomes payable on the purchase.
There is also a separate rebate for new purpose-built rental housing. It gives 100% of the GST or the federal part of the HST for eligible projects where construction begins after September 13, 2023 and before 2031, and is substantially completed before 2036.
What to do next
- Find your agreement of purchase and sale and note the price and how HST is treated in it.
- Find out the unit's FMV, since it affects both the federal and Ontario rebates.
- Confirm when construction started and when tax first becomes payable, then diarize the two-year filing date.
- Plan for the one-year residential use requirement.
- Ask a lawyer or accountant to confirm which current rebate rules fit your purchase.
Frequently asked questions
Can I get the Ontario rebate if the federal rebate is not available?
Yes, in some cases. The Ontario NRRP rebate is available whatever the unit's FMV, and it can be claimed even where the federal rebate is unavailable only because the FMV is $450,000 or more.
What is the most I can recover from the Ontario part?
The Ontario NRRP and Ontario ENRRP together can give up to 100% of the 8% provincial part. For a lease of building and land, the combined maximum is generally $80,000.
Does a very expensive unit change the result?
It can. The Ontario ENRRP is gradually reduced for units with an FMV over $1.5 million and under $1.85 million, and none is available at $1.85 million or more.
What form do I use and by when?
NRRP rebates are claimed on Form GST524, with Form GST525 for co-op and multiple units. A purchaser-landlord must apply within two years after the end of the month in which tax first becomes payable.
Sources
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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