If you sell pre-construction or new-build inventory, this is worth knowing well before your next client conversation. Ontario has introduced a temporary, enhanced HST rebate on new homes, and it applies to a specific one-year signing window: agreements of purchase and sale entered into between April 1, 2026 and March 31, 2027. Here's what it actually covers, and where the details are still being finalized.
What the rebate actually is
The 13% HST on a new home in Ontario is made up of an 8% provincial portion and a 5% federal portion. Ontario's enhancement works through its existing New Housing Rebate (for owner-occupied homes) and New Residential Rental Property Rebate (for long-term rental properties), both of which are rebates of the provincial 8% portion.
Under the enhancement, eligible buyers can recover 100% of the provincial portion, up to a maximum of $80,000, on homes valued up to $1 million. That $80,000 maximum also applies to homes valued between $1 million and $1.5 million. Above $1.5 million, the maximum rebate declines in a straight line down to a floor of $24,000 at $1.85 million, and stays at $24,000 for anything priced higher.
| Home value up to $1,000,000 | Up to $80,000 provincial rebate |
| $1,000,000 to $1,500,000 | Up to $80,000 provincial rebate |
| $1,500,000 to $1,850,000 | Declining from $80,000 to $24,000 |
| $1,850,000 and above | Standard $24,000 rebate |
Ontario has also said it intends to provide additional relief equivalent to the federal 5% portion of HST, for the same eligible transactions. That's why you may see this rebate advertised elsewhere as worth up to roughly $130,000 in total. The provincial $80,000 figure is confirmed in Ontario's own budget documents; the federal-portion relief is still being worked out administratively, so treat the combined total as directionally correct rather than locked in until further details are released.
Who qualifies, and this isn't first-time-buyers-only
Unlike some homebuyer incentives, this enhanced rebate is not limited to first-time buyers. It's available to anyone purchasing an eligible new or substantially renovated home for use as their own primary residence, or as a long-term residential rental property, provided the agreement of purchase and sale falls within the window. Eligible home types include detached and semi-detached houses, duplexes, condos, townhouses, rowhouses, co-op housing shares, and mobile or floating homes.
Separately, Ontario also announced its own first-time home buyers' HST rebate in late 2025. A first-time buyer who qualifies for both can claim either or both, but the combined total is capped at whatever the enhanced rebate alone would provide, so it isn't a way to stack past the maximum.
The timing window matters more than usual
The headline eligibility rule is straightforward: the agreement of purchase and sale has to be signed between April 1, 2026 and March 31, 2027. But construction timelines matter too, and they vary by scenario:
- New homes bought from a builder: construction must begin by December 31, 2028 and be substantially complete by December 31, 2031.
- Owner-built homes: construction must begin between April 1, 2026 and March 31, 2027, and be substantially complete by December 31, 2029.
- New rental properties: timelines differ depending on whether construction began before or after March 31, 2026, generally requiring substantial completion by December 31, 2029.
One detail worth passing along to anxious clients: if a buyer already closed on an eligible new home earlier in 2026, before the rebate was formally announced, they haven't missed the window. Entitlement is based on the date the agreement of purchase and sale was signed, not the announcement date, so early closings within the window still qualify.
What's still being finalized
As of this writing, the specific regulations and updated rebate application forms for the enhanced rebate hadn't yet been released, even though the program is already in effect for agreements signed on or after April 1, 2026. In practice, that means builders may not yet be able to credit the enhanced rebate directly at closing for every transaction. Where that's the case, buyers may need to pay the HST upfront and apply to the Canada Revenue Agency for the rebate afterward, once the regulations are in place.
This is a case where it's worth telling clients plainly: the relief is real and the eligibility window is locked in, but exactly how and when the money shows up, credited at closing versus reimbursed later, is still being worked out. Encourage buyers to ask their builder directly how they intend to administer it.
What this means for you
- Pre-construction and new-build listings priced up to $1.5 million just became meaningfully more attractive for exactly one signing-window year, worth up to $80,000 in provincial relief alone.
- This applies to investor and rental-property buyers too, not just owner-occupiers, so it's relevant across more of your client base than a typical first-time-buyer incentive.
- Buyers considering a new-build purchase have a real reason to move within this window rather than wait, since the rebate is tied to the signing date of the agreement, not the closing date.
- Set expectations early that the exact mechanics of receiving the rebate, credited or reimbursed, may still be in flux depending on the builder and when regulations land.
If you have a new-build client trying to decide whether to move now, send them my way and I'll walk through how this interacts with their financing and closing timeline.
This post is based on Ontario's official 2026 budget backgrounder on the enhanced New Housing Rebate and New Residential Rental Property Rebate, published March 26, 2026 and updated May 5, 2026. Regulations implementing these changes were still being finalized at the time of writing. Confirm current details with a mortgage professional, the builder, and, where needed, a real estate lawyer or accountant before advising a client.