Housing prices and mortgage rates have pushed many Ontarians out of the market over the past two years. But a new provincial policy aims to make buying a home (especially a pre-construction home) more attainable by offering a new HST rebate structure that reduces the tax burden on buyers.
If you’re a first-time buyer in Ontario or planning to upgrade to a larger home, this rebate could be a game changer.
This article breaks down:
- What the Ontario HST rebate is
- Who qualifies
- How much money buyers could save
- Real example scenarios
- How this could impact the housing market
- What to do right now to access it
What Is Ontario’s HST Rebate?
The Ontario HST rebate is a refund on a portion of the Harmonized Sales Tax that applies to newly built homes and pre-construction purchases.
New-build homes are taxed differently than resale homes. While resale homes are not subject to HST, new homes are, which can add tens of thousands of dollars to the purchase price.
The new provincial rebate:
- Reduces the HST cost upfront for buyers
- Increases the maximum rebate amount
- Expands who qualifies (not just first-time buyers)
- Applies to more price ranges, including higher-value homes in major markets like the GTA
Bottom line:
The rebate lowers closing costs and reduces the cash needed at possession.
Who Qualifies For The HST Rebate?
To qualify for the HST rebate in Ontario, buyers must meet one of the following:
✅ Purchasing a newly built home
✅ Buying a pre-construction condo or townhouse
✅ Building a home yourself on land you own
✅ Substantially renovating more than 90 percent of an existing home
And one of these must apply:
- You intend to live in the home as your primary residence
- An immediate family member (parent, child, spouse, common-law partner) will use the home as their primary residence
You do not have to be a first-time homebuyer to qualify.
That expansion alone opens the door for:
- Move up buyers leaving condos for townhouses
- Families who want to build or buy pre-construction
- Downsizers who are selling and moving into new-build condos
Before the change, many buyers with higher incomes or larger down payments were excluded. Now, more price ranges qualify.
How Much Can Buyers Save?
The updated rebate increases the maximum refund amount and, more importantly, applies to more price brackets.
Savings breakdown:
- Rebates can range from $16,000 to over $24,000
- Rebate applies to the provincial portion of HST (8 percent)
- Higher-priced homes now qualify due to less restrictive caps
Example for a $700,000 pre-construction condo:
- HST portion applicable: approx. $56,000
- Rebate: approx. $24,000
Example for a $950,000 new-build townhouse:
- HST portion applicable: approx. $76,000
- Rebate: approx. $24,000
(Previously, this property wouldn’t have qualified due to price cap)
Example for a $1.2M new-build detached home:
- HST portion applicable: approx. $96,000
- Rebate: approx. $16,000 to $24,000
(Depending on final policy wording and occupancy)
Even condos well below Toronto’s average price still benefit.
Why The Rebate Matters In 2025
Ontario’s housing affordability has been strained by:
- High interest rates
- Low inventory
- Rapid immigration growth
- Construction slowdowns
For pre-construction buyers, closing costs are already high:
- Development levies
- Lawyer fees
- Land transfer tax
- HST
By reducing the HST upfront, buyers need less cash to close.
What this changes:
- First-time buyers can qualify for mortgages more easily
- Investors may return to pre-construction
- Builders could accelerate stalled projects
In other words:
The rebate doesn’t just help buyers – it stimulates new housing supply.
How It Will Change Buyer Behavior
Expect to see three trends:
1. More buyers will shift to pre-construction
- Longer closings
- More time to save
- Lower entry cash needed
2. Move-up buyers become active again
- Families locked into too-small condos finally have a way out
3. Developers will relaunch paused projects
- Investor confidence returns
- Construction jobs increase
This rebate stimulates both demand and supply, something Ontario urgently needs.
Quick Checklist To Access The Ontario HST Rebate
If you want the rebate, here’s what to do:
Before You Buy
- Confirm the property is eligible (builder or lawyer can verify)
- Ensure the Agreement of Purchase and Sale includes rebate clauses
- Check if your purchase price falls into eligible rebate tiers
During The Build
- Keep copies of deposits and correspondence
- Save upgrade invoices (some affect HST calculations)
At Closing
- Lawyer submits the rebate paperwork on your behalf
- You receive the rebate directly or as a credit applied to closing costs
Pro Tip: Some builders already structure their pricing with the rebate applied. Others require buyers to pay the full HST and claim it later. Always ask.
Final Takeaway
The Ontario HST rebate is more than a tax refund. It could:
- Put $16,000–$24,000 back into buyers’ pockets
- Open the door for families to move up in the market
- Increase housing supply by incentivizing new builds
If you’ve been waiting for the market to shift in your favor, this might be the moment.
Subscribe to our newsletter:
Get weekly insights on home prices, real estate trends, and breaking news in Canada’s housing market.
Stay informed. Stay ahead.
Canada Housing Market 
Leave a comment