New housing rebate

What the rebate recovers

The rebate gives back some of the tax on a new home to an individual who will live in it. A corporation or partnership cannot claim it, and housing bought to rent out falls under different rules. Eligible homes include new or substantially renovated houses bought from a builder, co-operative housing shares, and homes built or substantially renovated by the owner. A substantial renovation generally means removing or replacing at least 90% of the interior.

In Ontario the rebate has two layers. The federal rebate covers the GST or federal part of the HST. In the CRA form instructions it is 36% of that tax, to a maximum of 6,300 dollars, and it is available only when the home’s fair market value is under 450,000 dollars, with the full amount at 350,000 dollars or less. The Ontario rebate is 75% of the provincial part of the HST, to a maximum of 24,000 dollars, and it is not subject to the 450,000 dollar limit that applies to the federal rebate.

Recent Ontario changes

Two newer measures can sit on top of the base rebates. First-time home buyers may qualify for a separate federal GST/HST rebate and an Ontario first-time buyers’ rebate. A temporary Ontario enhanced rebate applies where the agreement with the builder is signed between April 1, 2026 and March 31, 2027, or construction of an owner-built home begins in that window. Together with the base Ontario rebate it can reach 80,000 dollars of the provincial part, with limits by home value. Because these rules are new, confirm the current conditions before relying on them.

An illustrative example

Assume a buyer purchases a new Ontario home from a builder for 400,000 dollars before tax and intends to live in it. These numbers are illustrative only, not a calculation of any real claim. The federal rebate would be reduced because the value is above 350,000 dollars. The Ontario rebate would be 75% of the 32,000 dollars of provincial tax, which is 24,000 dollars and reaches the maximum. Many builders credit the rebate on closing, but the buyer still signs the application and is responsible for eligibility.

Applying and keeping records

For a house bought from a builder, the application is Form GST190, with RC7190 ON for the Ontario part. Owner-built homes use GST191 with its worksheet and RC7191 ON. Keep the filled-out forms and the original invoices for six years. The CRA does not accept photocopies, card slips or account statements in place of original invoices in the claimant’s name.

If a builder credits the rebate to you and you turn out not to qualify, you may have to repay it to the CRA. Builders who knew or should have known the buyer was ineligible can share that liability.

What to discuss with your accountant

Bring the purchase agreement, the statement of adjustments, the occupancy date, and details of anyone buying with you. Ask whether you qualify as a first-time buyer, whether the home will be your primary residence, and how the rebate affects what you report elsewhere.