If you’re considering buying a newly built home in Ottawa or elsewhere in Ontario, there is an important change worth understanding before you sign a purchase agreement.
Ontario’s temporary new-home HST relief could provide eligible buyers with up to $130,000 in combined HST relief on a qualifying new home.
And here’s something many buyers may not realize: you do not have to be a first-time home buyer to qualify.
The relief combines two programs: the Ontario Enhanced New Housing Rebate (ENHR) and the Ontario New Home Affordability Payment (ONHAP). Together, they can provide relief on the provincial and federal portions of HST for eligible purchases.
Let’s look at how the programs work, who may qualify, and what buyers should know before purchasing a new build.
Who Can Qualify for the New-Home HST Relief?
The temporary relief is designed for eligible buyers purchasing a qualifying newly built or substantially renovated home.
For the owner-occupied program discussed in this article:
You do not have to be a first-time home buyer.
The home must be newly built or substantially renovated. This relief does not apply to an ordinary resale home.
You, or a qualifying relation, must generally intend to use the home as a primary place of residence.
The purchase must meet the program’s agreement dates and other eligibility requirements.
There are two parts to the relief.
Understanding the Two HST Relief Programs
1. Ontario Enhanced New Housing Rebate (ENHR)
The ENHR provides relief on the provincial portion of HST, which is 8%.
Eligible buyers may receive up to $80,000.
For qualifying homes:
Homes valued at $1 million or less may qualify for the full 8% provincial HST relief, up to $80,000.
Homes valued above $1 million and up to $1.5 million may qualify for a flat $80,000 rebate.
Homes valued above $1.5 million and below $1.85 million may qualify for a reduced amount.
Homes valued at $1.85 million or more do not qualify for the enhanced rebate, although the existing Ontario new housing rebate may still be available where applicable.
2. Ontario New Home Affordability Payment (ONHAP)
The ONHAP provides additional relief on the federal portion of HST, which is 5%.
Eligible buyers may receive up to $50,000.
The amount depends on the purchase price:
Homes valued at $1 million or less may qualify for up to $50,000.
Homes valued above $1 million and up to $1.5 million may qualify for a flat $50,000.
Homes valued above $1.5 million and below $1.85 million may qualify for a reduced amount.
Homes valued at $1.85 million or more do not qualify for ONHAP.
The ONHAP is not limited to first-time buyers. However, it is connected to eligibility for the Ontario Enhanced New Housing Rebate or the applicable rental rebate program. The amount may also be reduced by the federal portion of another HST rebate the buyer is entitled to claim, including the federal first-time home buyer rebate.
Together, the two programs may provide up to $130,000 in HST relief.
What Could This Mean on an $850,000 New Build?
Let’s use an example.
Sam and Pat are purchasing an $850,000 newly built home in Ottawa. They already own a home, so they are not first-time buyers.
Assuming they meet the eligibility requirements for both temporary programs:
Ontario Enhanced New Housing Rebate: up to $80,000
Ontario New Home Affordability Payment: up to $42,500, representing 5% of the $850,000 purchase price
Potential combined HST relief: up to $122,500
This example illustrates why the temporary relief is worth understanding even if you have owned a home before.
The actual amount will depend on the purchase agreement, the HST payable, the buyer’s eligibility and how the rebates are applied. A buyer who qualifies for another federal HST rebate may also see an adjustment to the ONHAP amount.
Important Dates and Eligibility Requirements
The temporary programs have specific timing and eligibility rules. For qualifying purchases of a home and land from the same builder:
The purchase agreement must generally be entered into between April 1, 2026 and March 31, 2027.
Construction must begin on or before December 31, 2028.
The home must be substantially completed on or before December 31, 2031.
The total consideration, excluding HST, must be below $1.85 million.
These are important requirements, and other conditions may apply depending on the type of purchase and circumstances.
Do not assume that a home qualifies simply because it is newly built or because the agreement is signed during the temporary program period. Confirm the details with your builder, lawyer and the Canada Revenue Agency (CRA).
What About First-Time Home Buyers?
First-time buyers may have access to additional benefits beyond the temporary Ontario relief.
Depending on their circumstances and the type of property they purchase, they may qualify for programs such as:
The federal First-Time Home Buyers' GST/HST rebate, which may provide up to $50,000 in federal HST relief on an eligible new home.
The Ontario first-time home buyer rebate, which may provide relief on the provincial portion of HST for qualifying purchases.
The Ontario Land Transfer Tax refund, which may provide eligible first-time buyers with a refund of up to $4,000.
These programs have their own eligibility requirements. The federal first-time buyer GST/HST rebate applies to qualifying new homes, while the Ontario Land Transfer Tax refund may also apply to eligible resale purchases.
It is important to understand how the different rebates interact. In particular, the ONHAP amount may be reduced by the federal portion of another HST rebate you are entitled to receive.
I’ll cover first-time buyer benefits in more detail in a separate article.
Questions to Ask Before Signing a New-Build Agreement
Before committing to a new construction purchase, make sure you understand how the builder is handling the HST relief.
Here are a few questions worth asking:
Is the advertised purchase price inclusive of the applicable HST rebates?
Which rebates or payments are being credited to me?
Will the builder apply the eligible amounts directly at closing?
What happens if I am later found not to qualify?
What paperwork or applications will I need to complete?
Have the purchase agreement and rebate provisions been reviewed by my real estate lawyer?
Do not rely on a verbal explanation or assume that a rebate is automatic. The wording in your purchase agreement and the closing documents matters. Best practice is to get your real estate lawyer to review the agreement of purchase and sale provided by the builder. Talk to your lawyer before signing!
Where Can You Find More Information?
Because these programs involve specific eligibility rules, dates and calculations, always refer to the official government information and get professional advice before making a purchase decision.
Useful resources:
Considering a New Build in Ottawa?
Buying a newly built home is a significant decision, and understanding the HST relief available can help you make a more informed choice.
Whether you are purchasing your first home, moving into a different home, or considering a new build as your next chapter, it is worth understanding the programs before signing an agreement.
If you’re exploring new construction in Ottawa and have questions about the buying process, I’m happy to help you understand the real estate considerations and connect you with the right professionals for the tax and legal details.
Shelley Snyder
Ottawa Realtor | Coldwell Banker Coburn Realty, Brokerage
Buyers • Sellers • Downsizers
613-854-4452
shelley@shelleysnyder.com
Disclaimer: This article is for general informational purposes only and is not tax, legal or financial advice. HST rebate programs have detailed eligibility requirements and may change. Confirm your individual circumstances with the Canada Revenue Agency, your lawyer and your tax professional before entering into a purchase agreement or relying on a rebate.
Comments:
Post Your Comment: