GST new housing rebate: 36% of GST, up to $6,300, gone at $450,000

How much is the federal rebate at each price?

The federal rebate is the lesser of $6,300 and 36% of the GST (or federal part of the HST) your client paid, as long as the total price is $350,000 or less. Between $350,000 and $450,000 it's multiplied by ($450,000 minus the price) divided by $100,000, and at $450,000 or more it's nothing laws-lois.justice.gc.ca. The thresholds sit in subsection 254(2) of the Excise Tax Act, and they're the same in 2026 as they have been for years.

The GST is 5%, so 36% of it works out to 1.8% of the price, and the $6,300 cap is reached at exactly $350,000 canada.ca. That's why every home in the phase out band starts from the full $6,300 before the reduction. For a house bought from a builder, the price is the amount before tax, including a taxable assignment of the purchase agreement, and it leaves out land transfer tax and fees paid to people other than the builder, such as legal fees canada.ca. On the seller's side, profit on an assignment held under 365 days is business income under the property flipping rule.

Worked example: a $400,000 new home in Ontario returns $27,150

Say your client signed with a builder in 2025 for a $400,000 house and land in Ontario, where the HST is 13%: 5% federal and 8% provincial. They aren't a first time buyer, so only the standard rebates apply.

Push the price to $700,000 and the federal rebate drops to $0, but the Ontario rebate stays at $24,000. Ontario's rebate has no price ceiling: the CRA says it may be available even when the home is worth $450,000 or more canada.ca. Clients above the federal threshold often skip the claim because they assume they don't qualify for anything.

Ontario has a temporary rebate for agreements signed from April 2026

The Ontario enhanced new housing rebate is a temporary top up for homes bought from a builder under an agreement signed between April 1, 2026 and March 31, 2027, or owner built homes where construction starts in that window canada.ca. It covers up to $80,000 of the 8% provincial part. For a house and land bought from a builder, the purchase price before tax has to be under $1,850,000, with the Form RC7190 ON calculation reducing the amount above $1,500,000; a house on leased land or a cooperative housing share uses $2,090,500 instead canada.ca.

Timing conditions are strict for a builder purchase: construction has to begin by December 31, 2028 and be substantially complete by December 31, 2031. The CRA's Form GST190 page, updated July 13, 2026, says claims that include this rebate can only be filed by mail until fall 2026, when it begins processing them canada.ca. Claims without it can already be filed online.

If the buyer turns out not to qualify but the builder already paid or credited the enhanced rebate, the buyer repays the CRA canada.ca. A first time buyer also has a separate federal rebate that tops up this one, covered in the first time home buyers' GST rebate.

Who qualifies, and which clients are shut out?

The rebate is for individuals only. A corporation or a partnership can't claim it, and the home has to be bought or built as the primary place of residence of your client or a relation canada.ca. A relation means someone related by blood, marriage, common law partnership or adoption, and for this rebate it also includes a former spouse or former common law partner canada.ca.

Joint ownership is where claims fail. Only one individual claims for the home, and if a corporation or partnership is one of the owners, nobody can claim canada.ca. Under subsection 254(2), your client (or a relation) also has to be the first person to live in the home after construction, and must have paid all the GST/HST on the purchase laws-lois.justice.gc.ca.

A renovated home counts only when the work is a substantial renovation, which generally means 90% or more of the interior of the existing housing was removed or replaced, measured on livable space only canada.ca. A client buying a new unit to rent out uses the separate new residential rental property rebate in Guide RC4231 instead canada.ca.

The deadline is two years, and the builder usually files it

Most clients never file anything themselves. The builder can pay or credit the rebate at closing if your client applies to the builder within two years of ownership transfer and the builder agrees laws-lois.justice.gc.ca. If that happens, your client sends nothing to the CRA. The catch: if the client didn't qualify, the builder and purchaser are jointly and severally liable to repay the rebate canada.ca.

When the builder doesn't credit it, your client files Form GST190 with the CRA within two years from the date ownership was transferred, and the Ontario part goes on Form RC7190 ON canada.ca. Miss the two years and subsection 254(3) bars the rebate laws-lois.justice.gc.ca.

A client who builds their own home, or hires contractors to build it, files Form GST191 with worksheet GST191 WS, plus RC7191 ON in Ontario canada.ca. The $450,000 test then uses fair market value, land included, at the time the work was substantially completed, and the two years run from the earliest of occupancy, an exempt sale before occupancy, or substantial completion. In Ontario the owner built provincial rebate caps at $24,000 if HST was paid on the land, or $16,080 if it wasn't canada.ca. Keep the original invoices for six years canada.ca.