New-Build GST/HST Rebates for First-Time Buyers, Without the Headache
New homes in Ontario carry 13% HST that resale homes don't — but between the first-time buyer GST relief and the long-standing new housing rebates, a qualifying buyer can claw back a serious share of it.
First, the tax itself
Buy a resale home in Ontario and there's no sales tax on the price. Buy a newly built home — from a builder, or a home that has been substantially renovated — and HST of 13% applies to the purchase price: 5% GST to Ottawa and 8% to Ontario. On a new build, that's a five-figure tax bill on top of the price, land transfer tax, and the builder's closing adjustments. It's the single biggest reason new construction compares worse on paper than it first looks. The relief below exists in two layers: a newer, generous one aimed at first-time buyers, and an older rebate system that has been quietly reducing this bill for years.
Layer 1: the first-time buyer GST relief
In 2025, the federal government introduced GST relief specifically for first-time home buyers purchasing new housing. As of writing, the shape of it is this:
- New homes priced up to $1 million: the full 5% GST is eliminated — a saving of up to $50,000 at the top of the band.
- Between $1 million and $1.5 million: the relief phases out gradually, so the saving shrinks as the price climbs.
- Above $1.5 million: no relief under this measure.
"First-time buyer" has a specific definition for this program — broadly, an adult who has not owned and lived in a home as a principal residence in the current year or the previous four calendar years, and who will live in the new home as their principal residence. The relief applies to homes bought from a builder, homes built on land you own, and certain other new-housing arrangements, each with its own conditions and timing rules. Because this measure is recent, treat the details as moving parts: confirm eligibility and the claim mechanics against the rules in force when you sign, and get your lawyer or accountant to verify before you count the money.
Ontario has also signalled relief on the provincial 8% portion for first-time buyers of new homes, which would raise the combined saving considerably where it applies. As of writing this is the piece most likely to change, so check the current status before relying on it in your budget.
Layer 2: the original new housing rebates
Long before the first-time buyer measure, Canada and Ontario each ran a GST/HST New Housing Rebate (NHR) that refunds part of the tax on new homes, available to any buyer who will live in the home as a principal residence — not just first-time buyers:
- Federal NHR: returns a portion of the 5% GST on homes with a fair market value up to $350,000, phasing out completely by $450,000. In today's Ontario market, few new homes fall in that band, which is precisely why the first-time buyer relief was needed — but if you're buying a modestly priced new build, this rebate may still be the one that applies to part of your claim, and the two programs' interactions need care.
- Ontario NHR: returns 75% of the provincial 8% portion on the first $400,000 of value, worth up to $24,000, phasing out between $400,000 and $500,000.
These rebates have strict conditions: the home must be your principal residence, the claim must be filed within two years of closing in most cases, and only one claim per home. Buyers routinely lose money here by assuming the builder handled it — see the next section.
Builder credit vs. claiming it yourself
When you buy from a builder, the rebates are usually dealt with in one of two ways. The builder-credit route: the builder credits the expected rebate against your closing balance so you pay less on the day, and in exchange you assign the rebate to the builder and sign the claim forms at closing. It's convenient — but the builder is then being reimbursed with your rebate, so the credit you're given should equal the rebate you're owed, and the paperwork you sign makes you responsible if the claim is later denied (for example, because you didn't move in as required). Read what you sign. The claim-it-yourself route: you pay the full HST at closing and file the rebate claim with the CRA afterward, receiving the refund yourself. This requires more cash on closing day and some patience, but keeps the claim — and control of it — in your hands.
Either way, the discipline is the same: get the estimated rebate in writing before closing, know which route your agreement uses, and calendar the two-year filing deadline the day you get your keys. If your plans change — you rent the home out instead of moving in, for instance — tell your lawyer before the claim goes in; rebates claimed on a home that doesn't qualify have to be repaid, with interest.
A simple checklist
- Confirm whether you're a "first-time buyer" under the GST relief definition — it's narrower than it sounds.
- Price the home against the $1 million and $1.5 million bands before you sign; small price differences near the phase-out change the tax math noticeably.
- Ask the builder, in writing, how the HST and each rebate are handled in your agreement.
- Verify Ontario's provincial relief status at signing time — as of writing it has been announced as a direction, and program details are what you'll be claiming under.
- File or assign the claim correctly, and keep the paperwork for the full review period.
None of this is exotic tax planning. It's reading the builder's paperwork with the tax lines circled — and on a new build, those lines are large enough to be worth a careful hour.
🧮 Rebate math by gstrebate.ca — our sister site runs the numbers end to end: work out your GST/HST rebate in the stacking calculator.
Next step
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