What Ottawa buyers need to know about the new 2026 HST relief

If you’ve thought buying a new home is out of reach, there is an important reason to take another look at the numbers in 2026.

The federal government and Ontario have introduced significant new HST relief measures for qualifying new homes.

You may have seen headlines mentioning up to $130,000 in HST relief.

That number is real — but it does not mean every first-time buyer will receive $130,000.

The actual benefit depends on the purchase price, the type of home, the timing of the transaction, the buyer's eligibility and how the federal and Ontario programs interact.

Let's look at a hypothetical Ottawa couple to see how these measures could work.

Meet Alex and Jordan

Alex and Jordan are in their late 20s. They both work and have been renting in Centretown for several years.

They had always assumed they would need to wait a few more years before buying.

Then they found a new-build townhome in Ottawa priced at $650,000.

Instead of simply looking at the purchase price and monthly mortgage payment, they decided to find out how the new HST rules could affect their overall cost.

Here's what they learned.

Step 1: First, determine whether you qualify

Being a renter doesn't automatically make someone a first-time home buyer for purposes of the federal rebate.

The federal First-Time Home Buyers' GST/HST rebate has specific eligibility requirements.

Generally, an eligible buyer must be at least 18 years old, be a Canadian citizen or permanent resident, and meet the program's first-time buyer test.

For example, the rules generally consider whether the buyer, or their spouse or common-law partner, owned and lived in a home during the calendar year in which the new home is purchased or the preceding four calendar years.

There are additional requirements concerning the home, the purchase and occupancy.

So before assuming you qualify, it's important to check the current CRA requirements.

CRA — First-Time Home Buyers' GST/HST Rebate

Step 2: Understand the federal first-time buyer rebate

The federal First-Time Home Buyers' GST/HST rebate can provide an eligible first-time buyer with a rebate of up to $50,000 on the GST or federal portion of HST.

For a qualifying new home valued at $1 million or less, the federal first-time buyer rebate can effectively recover 100% of the GST or federal 5% portion of HST, subject to the program's requirements.

For homes valued between $1 million and $1.5 million, the federal rebate is gradually reduced.

At $1.5 million or more, the federal first-time buyer rebate is not available.

For Alex and Jordan, their $650,000 townhome is below the $1-million threshold.

But that's only one part of the calculation.

Step 3: Ontario has its own HST relief

Because Alex and Jordan are buying in Ontario, they also need to understand the provincial portion of HST.

Ontario's Enhanced New Housing Rebate (ENHR) temporarily increases the available Ontario new housing rebate for qualifying homes.

For a qualifying home valued at up to $1 million, the Ontario ENHR can provide relief equal to 100% of the 8% provincial portion of HST, up to a maximum of $80,000.

For homes purchased from a builder, the temporary enhanced program applies to qualifying agreements entered into between April 1, 2026 and March 31, 2027, subject to the other program requirements.

For homes above $1 million, different rules apply.

This is why buyers shouldn't assume that the same rebate amount applies to every new home.

Step 4: Where does the $130,000 figure come from?

This is the part that has attracted the most attention.

Ontario's temporary measures also include the Ontario New Home Affordability Payment (ONHAP).

For someone eligible for the Ontario ENHR, the ONHAP can provide up to $50,000, representing up to 100% of the federal 5% portion of HST.

When you combine:

Up to $80,000 in Ontario provincial HST relief

plus

Up to $50,000 in Ontario New Home Affordability Payment

you get:

Up to $130,000

The $130,000 figure is therefore a legitimate maximum under the Ontario temporary measures.

The federal government has also described the temporary expanded HST relief as providing up to $130,000 off the cost of a qualifying new home.

But there is an important catch for first-time buyers.

The ONHAP is reduced by the federal portion of any GST/HST new housing rebate or First-Time Home Buyers' GST/HST rebate to which the buyer is entitled.

In other words, you cannot simply take every maximum number and add them together for a first-time buyer.

CRA specifically explains that a first-time buyer must claim the federal first-time buyer rebate first when determining the ONHAP amount.

So what could this mean for Alex and Jordan?

Let's use their $650,000 townhome as an illustration.

At 13% HST:

5% federal portion: $32,500

8% Ontario portion: $52,000

Total HST: $84,500

If Alex and Jordan qualify for the applicable first-time buyer and Ontario programs, the calculation could look approximately like this:

Federal first-time buyer relief

Up to $32,500

Because 5% of $650,000 is $32,500.

Ontario provincial HST relief

Up to $52,000

Because 8% of $650,000 is $52,000.

Ontario New Home Affordability Payment

The ONHAP can be up to $50,000, but it is reduced by the federal first-time buyer rebate.

In this example:

$50,000 maximum ONHAP

minus

$32,500 federal first-time buyer rebate

=

up to $17,500 remaining ONHAP

Potential total relief in this example:

$32,500 federal

• $52,000 Ontario provincial

• $17,500 ONHAP

=

Up to $102,000

This is an illustration, not a promise of a $102,000 rebate. Alex and Jordan would still need to satisfy all applicable eligibility requirements and confirm the treatment of the particular purchase.

The calculation demonstrates why it is important to look at the interaction between the programs rather than simply adding the headline maximums.

CRA confirms that the total Ontario provincial rebate cannot exceed the applicable provincial HST paid or payable, and that ONHAP is reduced by the federal GST/HST rebate available to the individual.

Step 5: Why you shouldn't simply assume you'll receive $130,000

This is probably the most important takeaway for buyers.

You may see:

$50,000 federal

+ $80,000 Ontario

= $130,000

But that isn't how every buyer's calculation works.

The $130,000 figure reflects the maximum potential combination of certain Ontario measures in qualifying circumstances.

For a first-time buyer, the federal First-Time Home Buyers' GST/HST rebate can reduce the amount available through the ONHAP.

The amount of HST actually payable also matters.

For example, on a $650,000 home, there is only $84,500 of total HST before rebates.

A rebate cannot exceed the applicable tax amount to which the rebate relates.

That's why the purchase price and the buyer's circumstances matter.

Step 6: The date you sign can matter

Timing is another important consideration.

The federal First-Time Home Buyers' GST/HST rebate has its own eligibility and timing rules.

Ontario's temporary Enhanced New Housing Rebate has a specific purchase agreement window.

For qualifying purchases from a builder, the Ontario ENHR generally applies to agreements entered into between April 1, 2026 and March 31, 2027, subject to the program's other requirements.

So if you're considering a new-build home, don't wait until closing to ask about HST.

Ask before you sign the Agreement of Purchase and Sale.

Step 7: Ask the builder how the rebate will be handled

Another important question is whether the builder will credit eligible rebates at closing.

For qualifying purchases from a builder, eligible rebate amounts may be assigned to the builder and credited against the amount payable at closing, provided the applicable requirements are met.

CRA's example of a qualifying $1-million Ontario new home shows the buyer assigning eligible rebate amounts to the builder and receiving the benefit at closing.

Your lawyer and builder should confirm exactly how this will work for your purchase.

A good question to ask is:

"Which HST rebates am I eligible for, and which amounts will be credited by the builder at closing?"

Step 8: Don't forget the other costs of buying

HST relief can make a meaningful difference, but it doesn't eliminate the other costs of purchasing a home.

Alex and Jordan still need to budget for:

• Deposit

• Mortgage financing

• Legal fees

• Land transfer tax

• Property taxes and adjustments

• Home insurance

• Condo or townhouse fees, if applicable

• Moving expenses

• Appliances and furniture

• Immediate home expenses

• An emergency fund

A rebate should improve the affordability picture — not encourage a buyer to stretch beyond a comfortable budget.

What should Ottawa first-time buyers do now?

If you're renting in Ottawa and considering a new-build home, start by understanding your actual numbers.

Before signing an Agreement of Purchase and Sale, ask:

1. Do I meet the federal first-time home buyer requirements?

2. Does the home qualify for the federal rebate?

3. Does it qualify for the Ontario Enhanced New Housing Rebate?

4. Could I qualify for the Ontario New Home Affordability Payment?

5. How do the different rebates interact in my situation?

6. What will the builder credit at closing?

7. What will my lawyer need to do?

8. What cash will I actually need on closing day?

Getting these questions answered before you sign can make the process much easier.

Thinking About Buying a New Build in Ottawa?

The 2026 HST changes may create a significant opportunity for eligible buyers — particularly those considering a qualifying new-build home.

And while you may have heard "up to $130,000", the most important number isn't the headline.

It's the number that applies to you.

Every purchase is different.

If you're considering a new-build townhome, condo or single-family home in Ottawa, I can help you understand the real estate side of the process and the questions you should be asking your builder, mortgage professional and lawyer.

My goal is simple: help you understand the numbers before you sign.

This article is for general information only and is not tax, legal, mortgage or financial advice. HST rebate eligibility, amounts, timing and application requirements depend on the buyer, property and transaction. Government programs and rules can change. Buyers should confirm their individual eligibility and applicable rebate amounts with the Canada Revenue Agency, their lawyer, builder and qualified tax or financial professional before entering into a purchase agreement.

Shelley Snyder, Sales Representative
Coldwell Banker Coburn Realty, Brokerage

Information current as of September 2026.