Last Updated: January 4, 2026
Ontario first-time homebuyers can now save up to $80,000 on new construction homes thanks to the provincial HST relief announced in the 2024 Fall Economic Statement, making Ottawa’s housing market significantly more accessible for those looking to enter the market in 2026.
The Ontario government removed the provincial portion of HST (8%) on qualifying new homes priced up to $1 million, with partial relief available for homes between $1 million and $1.5 million. Combined with the existing federal GST/HST rebate, Ottawa first-time buyers could pocket substantial savings at closing. With Ottawa’s average home price hovering around $650,000, this relief makes a meaningful difference for young professionals and families taking their first step into homeownership.
Key Highlights
TL;DR: Ontario’s HST relief eliminates the 8% provincial portion on new homes up to $1 million for first-time buyers. Combined with federal rebates (up to $6,300), total savings can reach $30,000-$80,000 depending on home price. The relief took effect for qualifying purchases and applies to newly constructed homes used as primary residences.
| Quick Facts | Details |
|---|---|
| 💰 Provincial HST Relief | 8% (up to $80,000 on $1M home) |
| 💰 Federal Rebate | Up to $6,300 (homes under $350K) |
| 📍 Eligibility | First-time buyers, new construction |
| 📅 Effective | January 2026 onwards |
| 🏠 Home Price Limit | Full relief up to $1 million |
| ⏰ Application Window | Within 2 years of closing |
Understanding the Ontario HST Relief Program
New residential construction in Ottawa suburbs where first-time buyers can benefit from HST relief.
Ontario’s housing affordability measures introduced in the 2024 Fall Economic Statement represent the most significant tax relief for first-time buyers in recent memory. The program specifically targets the provincial portion of HST, which at 8% represents a substantial chunk of a new home’s purchase price.
For a typical new construction home in Ottawa priced at $650,000, the provincial HST portion alone would be $52,000. Under the new relief program, qualifying first-time buyers would see this entire amount eliminated from their purchase costs. The savings scale with home value, reaching the maximum potential of $80,000 for homes at the $1 million threshold.
This relief applies specifically to newly constructed homes, substantially renovated properties, and land purchased with a new home. It does not apply to resale homes, which are already HST-exempt. The distinction is important for Ottawa buyers considering whether to purchase new or existing properties.
Who Qualifies for the HST Relief
Young professionals and families in Ottawa can benefit from significant HST savings on their first home.
Eligibility for Ontario’s first-time homebuyer HST relief follows specific criteria that buyers must meet to claim the full benefit.
First-Time Buyer Definition:
You qualify as a first-time homebuyer if neither you nor your spouse or common-law partner has owned a home that served as your principal residence anywhere in the world at any time. This definition follows the federal First Home Savings Account (FHSA) criteria.
Primary Residence Requirement:
The home must be your primary place of residence. Investment properties, vacation homes, and rental properties do not qualify for the relief. You must occupy the home within one year of closing.
New Construction Only:
The relief applies exclusively to:
- Newly constructed homes purchased from a builder
- Substantially renovated homes (where 90% or more of the building’s interior has been removed or replaced)
- Land with a new home built by the buyer
Price Thresholds:
| Home Price | Relief Amount |
|---|---|
| Up to $1,000,000 | Full 8% provincial HST relief |
| $1,000,000 - $1,500,000 | Partial relief (sliding scale) |
| Over $1,500,000 | No provincial HST relief |
Federal and Provincial Rebates Explained
The HST on new homes in Ontario totals 13%, comprised of 5% federal GST and 8% provincial PST. Different rebate programs apply to each portion, and understanding both helps Ottawa buyers maximize their savings.
Provincial HST Relief (8%)
The new Ontario first-time homebuyer relief eliminates the 8% provincial portion for qualifying purchases. This is separate from the existing Ontario New Housing Rebate program, which has been available to all buyers (not just first-timers) but with lower thresholds.
Existing Ontario New Housing Rebate (for comparison):
- Provides 75% rebate on provincial HST portion
- Maximum rebate: $24,000
- Full rebate for homes up to $400,000
- Phases out between $400,000 and $500,000
The new first-time buyer relief significantly expands these benefits by removing the entire 8% provincial portion up to $1 million.
Federal GST/HST Rebate (5%)
Understanding the paperwork involved in claiming HST rebates on your new home purchase.
The federal portion follows different rules that apply to all buyers, not just first-timers:
- Provides 36% rebate on the 5% federal GST portion
- Maximum rebate: $6,300
- Full rebate for homes priced up to $350,000
- Phases out between $350,000 and $450,000
- No rebate for homes over $450,000
Combined Savings Example:
For a $650,000 new construction home in Ottawa:
| Component | Calculation | Amount |
|---|---|---|
| Provincial Relief (First-Time) | $650,000 × 8% | $52,000 saved |
| Federal Rebate | $0 (price exceeds threshold) | $0 |
| Total Savings | $52,000 |
For a $350,000 condo or townhome:
| Component | Calculation | Amount |
|---|---|---|
| Provincial Relief (First-Time) | $350,000 × 8% | $28,000 saved |
| Federal Rebate | $350,000 × 5% × 36% | $6,300 |
| Total Savings | $34,300 |
How to Apply for HST Rebates
The application process depends on your purchase situation. Most Ottawa buyers working with established builders will have the rebate handled at closing, but understanding your options ensures you don’t miss out on entitled savings.
Method 1: Through Your Builder (Most Common)
Most builders in Ottawa automatically apply for rebates on your behalf and credit the amount toward your purchase price at closing. This means you pay the reduced amount upfront rather than waiting for reimbursement.
What to confirm with your builder:
- That they will apply for all applicable rebates
- The rebate amount is reflected in your closing statement
- You sign the required assignment forms
Method 2: Direct Application to CRA
If you build your own home, your builder doesn’t offer rebate assignment, or you need to claim rebates after closing, you can apply directly to the Canada Revenue Agency.
Required Forms:
| Form | Purpose |
|---|---|
| GST190 | GST/HST New Housing Rebate (builder purchase) |
| GST191 | GST/HST New Housing Rebate (owner-built) |
| RC7190-ON | Ontario New Housing Rebate |
Application Timeline:
- Submit within 2 years of the earlier of: occupancy date or ownership transfer date
- Processing typically takes 8-16 weeks
- Payments issued by direct deposit or cheque
Ottawa Housing Market Context
Ottawa neighbourhoods offer diverse new construction options for first-time buyers.
Understanding Ottawa’s real estate landscape helps first-time buyers identify where the HST relief provides the most value.
Current Ottawa Price Points (2025-2026)
| Property Type | Average Price | HST Relief (8%) |
|---|---|---|
| Condos | $350,000 - $450,000 | $28,000 - $36,000 |
| Townhomes | $450,000 - $550,000 | $36,000 - $44,000 |
| Single-Family (Suburbs) | $550,000 - $750,000 | $44,000 - $60,000 |
| Single-Family (Urban) | $650,000+ | $52,000+ |
Best Neighbourhoods for New Construction
Suburban Growth Areas:
- Barrhaven: Extensive new development with family-oriented communities
- Orléans: Growing east-end options with strong transit connections
- Stittsville: Newer subdivisions with competitive pricing
- Kanata: Tech-sector adjacent with modern builds
For detailed neighbourhood information, explore our guides to Orléans, Stittsville, and Westboro.
Additional First-Time Buyer Programs
Ontario’s HST relief works alongside other federal and provincial programs designed to help first-time buyers. Stacking these benefits maximizes your purchasing power.
First Home Savings Account (FHSA)
- Contribution limit: $8,000 per year (up to $40,000 lifetime)
- Tax treatment: Contributions are tax-deductible; withdrawals for home purchase are tax-free
- Eligibility: Canadian residents who haven’t owned a home in current year or previous four years
Home Buyers’ Plan (HBP)
- Withdrawal limit: Up to $60,000 from RRSPs
- Repayment: Must repay over 15 years
- Can be combined with FHSA
Ontario Land Transfer Tax Rebate
First-time buyers of resale or new homes in Ontario receive a rebate of up to $4,000 on land transfer tax. This applies regardless of the HST relief and can be claimed at closing.
First-Time Home Buyer Tax Credit (Federal)
A non-refundable tax credit worth up to $1,500 (calculated as $10,000 at 15%) available to first-time buyers on their annual tax return.
Common Mistakes to Avoid
Based on Ontario Real Estate Association guidance and common buyer experiences, these pitfalls can cost Ottawa first-time buyers their entitled savings:
-
Assuming resale homes qualify: The HST relief applies only to new construction. Resale homes are HST-exempt already—you won’t pay HST, but you also won’t receive a rebate.
-
Missing application deadlines: You have 2 years from closing or occupancy to apply. Missing this window means forfeiting your rebate.
-
Not confirming builder rebate handling: Some builders don’t automatically assign rebates. Confirm in writing before signing.
-
Failing to meet occupancy requirements: You must occupy the home as your principal residence within one year. Rental or investment use disqualifies you.
-
Joint purchases with non-first-time buyers: If purchasing with someone who has owned a home, eligibility may be affected. Consult a real estate lawyer.
Working with Ottawa Professionals
Navigating HST rebates requires support from qualified professionals who understand Ontario’s programs.
Real Estate Lawyers: Your lawyer handles rebate documentation at closing and ensures proper assignment from the builder. They can also advise on eligibility questions specific to your situation.
Mortgage Brokers: Understanding total purchase costs including or excluding HST relief affects mortgage qualification. Ottawa mortgage brokers familiar with new construction can factor rebates into your financing plan.
Real Estate Agents: Agents specializing in new construction can guide you through builder negotiations and ensure rebate provisions are clearly stated in purchase agreements.
FAQ
Q: Does the HST relief apply to resale homes in Ottawa?
No, resale homes are already exempt from HST in Ontario. The relief specifically targets new construction where HST is charged. This includes newly built homes, substantially renovated properties, and owner-built homes on purchased land.
Q: What if my spouse owned a home before but I haven’t?
If your spouse or common-law partner has previously owned a home that was their principal residence, you may not qualify as a first-time buyer for this relief. However, the existing Ontario New Housing Rebate (up to $24,000) may still apply regardless of first-time buyer status.
Q: Can I claim the HST relief if I buy a pre-construction condo?
Yes, pre-construction condos qualify as new construction. The relief would apply when the unit is completed and you take possession. Ensure your purchase agreement reflects the rebate assignment.
Q: How long does it take to receive the HST rebate if I apply directly?
The Canada Revenue Agency typically processes rebate applications within 8-16 weeks. Direct deposit speeds up receipt compared to cheque payments.
Q: What happens if I sell the home within a year of purchase?
If you don’t occupy the home as your principal residence for at least one year, you may be required to repay the rebate. The CRA can audit and recover funds if eligibility criteria aren’t maintained.
Q: Does this relief apply to vacation properties in cottage country?
No, the home must be your primary residence. Vacation properties, investment rentals, and secondary homes do not qualify for first-time buyer HST relief.
Q: Can I combine the HST relief with FHSA and HBP withdrawals?
Yes, all three programs work together. You can use FHSA and HBP funds for your down payment while claiming HST relief on the purchase. These programs address different aspects of home buying.
Q: What documentation do I need to keep for my HST rebate claim?
Retain your purchase agreement, closing statement, proof of occupancy, identification documents, and any builder correspondence regarding rebates. Keep these records for at least 6 years.
Final Thoughts
Ontario’s expanded HST relief represents a genuine opportunity for Ottawa first-time homebuyers to save tens of thousands of dollars on new construction purchases. With savings potentially reaching $80,000 on homes at the $1 million threshold, the program meaningfully addresses affordability concerns in a challenging market.
The key is understanding eligibility requirements, working with experienced professionals, and ensuring proper documentation throughout the process. Whether you’re eyeing a condo in downtown Ottawa or a family home in Barrhaven, the math now works more favourably for those entering the market for the first time.
For related information on Ottawa’s housing costs, explore our guides to cost of living in Ottawa and best neighbourhoods in Ottawa.
Sources: Ontario Ministry of Finance, Canada Revenue Agency, Ontario Real Estate Association
