Ontario Moves Forward With HST Rebate Legislation for New Homebuyers
Province says tax relief could spur housing construction, jobs and economic growth
The Ontario government has introduced legislation aimed at implementing its promised harmonized sales tax (HST) relief program for eligible new homes, a move the province says could lower costs for buyers while stimulating housing construction and economic activity.
The proposed HST Relief Implementation Act (Residential Property Rebates), 2026 was tabled on Monday by the Ministry of Finance. The legislation is intended to support Ontario’s plan to remove the 13 per cent HST from most new homes in partnership with the federal government.
According to the province, the initiative could provide eligible buyers with as much as $130,000 in tax relief and generate approximately 8,000 additional housing starts across Ontario next year. The government also estimates the measure could support up to 21,000 jobs and contribute an additional $2.7 billion to Ontario’s gross domestic product.
“We’re already seeing the positive impact of our commitment to remove the HST from most new homes, with more shovels in the ground on new homes across Ontario,” said Peter Bethlenfalvy, Minister of Finance. “Our government will continue fighting to lower costs for homebuyers, keep the dream of homeownership alive in Ontario and keep workers in our construction sector on the job.”
Relief Structure Targets Homes Under $1.5 Million
Buyers of lower-priced homes would receive the maximum benefit
Under the proposed framework, buyers purchasing eligible new homes valued at $1 million or less would qualify for the full 13 per cent HST relief, up to a maximum rebate of $130,000.
For homes priced between $1 million and $1.5 million, buyers would continue to receive the maximum rebate amount of $130,000. Relief for homes valued above $1.5 million would gradually decline, reaching a maximum rebate of $24,000 for homes priced at $1.85 million or more.
The legislation is required because of the federal government’s involvement in the initiative. Ontario said amendments to the Retail Sales Tax Act are necessary to establish a provincial top-up program worth up to $50,000, equivalent to the federal five per cent portion of the HST on a qualifying new home valued at $1 million.
The federal government has agreed to compensate Ontario for the top-up through an $875 million transfer payment.
The provincial component builds on existing rebate programs tied to the eight per cent provincial portion of the HST. Eligible buyers could already receive up to $80,000 through the enhanced New Housing Rebate and New Residential Rental Property Rebate programs. Combined with the proposed federal top-up, the total relief available would reach $130,000.
Applications Yet to Open as Ottawa Finalizes Regulations
Buyers who qualify during the eligibility window will still be able to apply later
While the province has not yet opened applications for the rebate program, officials said qualifying purchasers will still be eligible to apply retroactively once the system is in place.
For example, buyers who acquire an eligible home between April 1, 2026, and March 31, 2027, would still be able to submit applications at a later date, even if the application portal is not immediately available.
The legislation would also allow buyers to assign the provincial top-up rebate directly to builders. This mechanism would enable developers and sellers to deduct the full HST relief amount from the purchase price upfront, reducing the immediate financial burden on buyers.
Ontario said it continues to work with the federal government on the regulatory changes needed to fully implement the program. The province has also requested that the Canada Revenue Agency administer the complete HST relief framework.
Additional program details, including eligibility requirements and administrative procedures, are expected to be released once federal regulations are finalized.
Housing Measures Part of Broader Affordability Strategy
Province highlights rental housing incentives and infrastructure funding
The HST relief proposal forms part of a broader provincial strategy aimed at increasing housing supply and supporting residential development.
Ontario noted that it has already removed the full eight per cent provincial portion of the HST on qualifying purpose-built rental housing projects as part of efforts to encourage rental construction.
The government is also investing in housing-related infrastructure through programs such as the $4 billion Municipal Housing Infrastructure Program and the $1.2 billion Building Faster Fund. The latter initiative provides financial incentives to municipalities that achieve housing construction targets and accelerate development approvals.
The province said additional technical details related to program administration and rebate implementation are available online and will continue to be updated as the legislation and accompanying federal regulations move forward.