Section 02

HST and GST rebates on new homes: what London buyers need to know

Last reviewed October 30, 2026

New homes in Ontario are subject to 13% HST: 5% federal GST plus 8% provincial. Several rebates can reduce that, and two significant changes arrived in 2025 and 2026. Here's how they fit together. Tax rules are detailed and eligibility depends on your circumstances, so confirm with the CRA, Ontario's Ministry of Finance, your builder and your lawyer.

How HST works on a new home

Unlike most resale homes, newly built homes are taxable supplies, so HST applies to the purchase price. In practice, most Ontario builders advertise prices that include HST, net of the rebates, and the buyer assigns their rebates to the builder at closing. That's convenient, but it means:

• If you don't qualify for a rebate the builder assumed, for example because you won't live in the home as your primary residence, you'll usually owe the builder that amount at closing.
• If you qualify for a rebate the builder didn't assume, such as the first-time buyer GST rebate, you need to know whether the builder will credit it or you claim it yourself.

The standard new housing rebates

Ontario new housing rebate

Ontario rebates part of the 8% provincial portion of HST on new homes bought as a primary residence. The standard maximum is $24,000, and unlike the federal rebate, it isn't eliminated on higher-priced homes. Investors buying to rent may be able to claim a similar rebate through the new residential rental property rebate instead.

Federal GST new housing rebate

The standard federal rebate recovers part of the GST, but only on lower-priced homes, and it phases out completely above a price threshold set in the legislation. Given London's new-home prices, many buyers won't qualify for it, which is why the first-time buyer rebate below matters so much.

The federal first-time home buyers' GST rebate

This rebate is now part of federal law. Based on the Department of Finance's description:

• Amount: up to 100% of the GST on a qualifying new home, to a maximum of $50,000.
• Price: the full rebate applies to homes up to $1 million. It phases out between $1 million and $1.5 million (Finance Canada's example: a $1.25 million home gets 50%), and homes at $1.5 million or more don't qualify.
• Timing: the agreement of purchase and sale must be entered into with the builder on or after May 27, 2025 and before 2031, construction must begin before 2031, and the home must be substantially complete before 2036.
• Who: first-time buyers, defined using a look-back test on prior home ownership and occupancy, who will live in the home as their primary place of residence.
• What: new homes from builders (including condos), owner-built homes and some co-op shares.

See the Department of Finance backgrounder and the CRA's first-time home buyers' rebate page for the exact conditions.

Ontario's 2026 enhancement

Ontario temporarily enhanced its new housing rebate and added a separate payment for the federal 5% portion. Per the CRA's Ontario Enhanced New Housing Rebate notice (August 2026) and the province's New Home Affordability Payment page:

• Who and when: eligible buyers of new homes from a builder, as a primary residence, with an agreement of purchase and sale entered into from April 1, 2026 through March 31, 2027. It is not limited to first-time buyers.
• Provincial rebate (CRA-administered): up to $80,000 of the 8% provincial portion. The full provincial portion is rebated on homes up to $1 million, a flat $80,000 applies from $1 million to $1.5 million, partial relief applies above $1.5 million, and there is no enhancement at $1.85 million or more (the standard $24,000 rebate still applies).
• Federal portion: the enhanced rebate covers only the provincial part. A separate provincially administered Ontario New Home Affordability Payment of up to $50,000 addresses the federal 5% portion, with the same price tiers. It is reduced by any federal rebate you are entitled to, including the first-time buyer GST rebate.
• Combined: Ontario says eligible buyers could save up to $130,000, which effectively relieves the full 13% HST on homes up to $1 million.
• Conditions: construction must begin by December 31, 2028 and be substantially complete by December 31, 2031, and the purchase price must be under $1.85 million.

Questions to ask your builder

• Does the price include HST? Which rebates have you assumed I qualify for?
• If I qualify for the first-time buyer GST rebate, or the Ontario enhancement, will you credit it at closing, or do I apply myself?
• What happens if I turn out not to qualify for a rebate you assumed?
• Does the agreement date fall within the eligibility window for each rebate?

Investors and rental properties

If you're buying a new home to rent out, the owner-occupied rebates generally don't apply. A separate new residential rental property rebate may be available, subject to conditions such as the length of the lease. Investors should get tax advice before signing. Our sister site London Income Property covers rental investing more broadly.

Other first-time buyer help

New-home rebates stack with other programs such as the FHSA, the RRSP Home Buyers' Plan and Ontario's land transfer tax refund for first-time buyers.