Ontario’s No-HST Rule for New Build Homes: What Buyers Need to Know in 2026

Key Takeaways

• Ontario plans to temporarily remove the full 13% HST on new build homes valued up to $1 million, for purchase agreements signed between April 1, 2026 and March 31, 2027.
• The rebate combines the 8% provincial portion and the 5% federal portion, for a maximum saving of up to $130,000.
• Unlike the previous program, the one-year window is open to all buyers — not just first-time buyers.
• The signing date of your Agreement of Purchase and Sale (APS) is the single most important eligibility trigger.
• Final rules depend on legislation that is still moving through government, so buyers should confirm details before closing.

What the New HST Rule Actually Means

For years, buying a newly built home in Ontario meant paying a hefty Harmonized Sales Tax on top of the purchase price. That changed with the 2026 announcement. Premier Doug Ford announced the plan, saying the full 13 per cent tax will be removed for new homes valued up to $1 million from April 1, 2026 to March 31, 2027.

The savings are substantial. Temporary enhancements to Ontario’s existing New Housing Rebate will rebate the entire 8% provincial portion of the HST for eligible newly built homes valued at up to $1 million, and the federal government has agreed to also rebate the 5% federal portion, creating a maximum rebate of $130,000.

Who Qualifies for the Rebate

The biggest shift is who can claim it. Ontario is expanding its HST rebate to all buyers — not just first-time buyers — for one year. That means move-up buyers and even some investors may now benefit, where previously they received little or nothing.

To qualify, buyers generally need to meet these conditions:

1. Sign an Agreement of Purchase and Sale within the eligibility window of April 1, 2026 to March 31, 2027.
2. Purchase a newly built or substantially renovated home (not a resale property).
3. Buy a home valued at up to $1 million for the full rebate, with partial relief on higher-valued homes.
4. Meet construction and completion timelines set out in the provincial guidelines.

Construction must begin on or before Dec. 31, 2028, and the home must be substantially completed on or before Dec. 31, 2031. Requirements differ by home type, so checking provincial guidance is wise.

Why the Agreement Date Matters Most

The date you sign your purchase contract is the hard line that determines eligibility. If your Agreement of Purchase and Sale is dated before April 1, 2026 or after March 31, 2027, the enhanced rebate does not apply.

This is especially important for pre-construction and assignment deals, which are common across the GTA. In an assignment sale, rebate eligibility is determined by the original Agreement of Purchase and Sale between the first buyer and the builder — not the date you sign the assignment agreement. If you’re navigating a major property purchase or planning related work afterward, it helps to understand the full picture the way you would before starting a renovation in Ontario.

How Builders Are Handling It Right Now

Because the enabling legislation is still being finalized, builders are taking different approaches. Neither federal nor provincial governments have passed the enabling legislation, leaving those in the industry unsure how to tell buyers about the potential discounts they may someday qualify for.

Approaches vary widely across the market:

• Some builders quote the full price and leave buyers to claim the rebate themselves from the CRA.
• Others list the home at the reduced price but add a clause making the buyer responsible if the rebate falls through.
• A smaller group is waiting for legal clarity before changing anything.

Given this uncertainty, choosing the right professionals matters as much as choosing the right home. The same care you’d take when learning how to choose a reliable contractor in Ontario applies to selecting a builder, lawyer, and mortgage advisor here.

Steps to Protect Your Eligibility

Buyers can take practical steps to avoid losing out on a rebate worth tens of thousands of dollars:

1. Confirm your APS is dated within the April 2026 to March 2027 window.
2. Get the rebate treatment in writing, including who claims it and when.
3. Be prepared to fund the rebate amount at closing, since purchasers will need to fund the amount of the rebate on closing and file rebate claims with the CRA, awaiting payment.
4. Keep all documents, since you may need to apply directly rather than assigning the rebate to the builder.

Budgeting for the up-front cost is essential, much like planning for other ongoing homeownership expenses such as your Ontario home insurance bill.

Final Thoughts

Ontario’s no-HST measure for new build homes is one of the largest housing tax incentives in a generation, but it comes with a fixed deadline and rules that are still being settled. Buyers who understand the timing, confirm details in writing, and work with experienced professionals are best positioned to capture the full saving.

This article is for general information only and does not constitute legal, tax, or financial advice. Always confirm current eligibility with the Government of Ontario, the CRA, and a qualified professional before making a purchase decision.

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