Ontario temporary HST rebate enhancement

Summary#

These final regulations (SOR/2026-130) put in place a temporary expansion of Ontario’s provincial portion of the Harmonized Sales Tax (HST) rebates for new homes. The changes apply to purchase agreements made between April 1, 2026 and March 31, 2027 and are treated as coming into force on April 1, 2026.

What it does#

• Implements Ontario’s temporary enhancement to the Ontario New Housing Rebate (ON NHR) and the Ontario New Residential Rental Property Rebate (ON NRRPR) for the provincial 8% portion of the HST.
• Sets the main eligibility window: agreements for purchase generally must be entered between April 1, 2026 and March 31, 2027.
• Adds construction timing rules:
  • For the enhanced ON NHR, construction or substantial renovation must begin before 2029 and be substantially completed before 2032.
  • For the enhanced ON NRRPR:
    • If construction began on or before March 31, 2026, the rebate is limited to single-unit homes and condo units and must be substantially completed before 2030.
    • If construction begins after March 31, 2026 but before April 1, 2027, the rebate can apply to more types of units but must be substantially completed before 2030.
• Changes the rebate amounts and how they phase out:
  • Provides full relief of the provincial HST (the full 8%) for qualifying homes valued up to $1,000,000.
  • For homes valued between $1,000,000 and $1,500,000, combined rebates can reach $80,000.
  • The rebate is gradually reduced for homes priced between $1,500,000 and $1,850,000, down to at least $24,000 for homes above $1,850,000.
• Confirms the federal regulations (the New Harmonized Value-added Tax System Regulations, No. 2 (Ontario)) give legal effect to Ontario’s decision and that the Canada Revenue Agency will administer the rebates and update forms and guidance.
• Repeats and formalizes application timing and limits (for example, filing deadlines and maximum total rebate amounts such as $80,000 where applicable).

Who's affected#

• Residents and prospective homebuyers in Ontario who buy new or substantially renovated homes under agreements made between April 1, 2026 and March 31, 2027.
• Owners and operators of long‑term rental housing and purchasers of new rental units who meet the construction and completion rules.
• Builders and cooperative housing corporations that sell new homes or shares related to housing.
• Canada Revenue Agency (CRA), which will administer the expanded rebates and update forms and guidance.
• The effect on other groups (for example, which exact projects qualify in complex cases) may be unclear without looking at the detailed rules and formulas in the regulations.

Why it matters#

• For eligible buyers, the change can lower the effective purchase price of certain new homes by cutting or eliminating the provincial portion of the HST. That can improve affordability for some buyers who meet the rules.
• For builders and developers, the enhanced rebates may affect pricing, demand, and how projects are marketed during the one‑year agreement window.
• The measure is a provincial policy decision implemented through federal regulations. The cost (foregone provincial HST revenue) is attributed to Ontario, while the CRA handles administration.
• If you are buying a new home in Ontario during the specified dates, you should check whether your purchase and construction timing meet the rules and expect to apply to the CRA for the rebate.