Ontario’s New HST Rebate Is a Game Changer for First-Time Home Buyers
How Ontario’s new HST rebate could save you up to $130,000 (and why now may be the best time in years to buy your first condo)
A Turning Point for First-Time Buyers
If you’ve been waiting for the right moment to buy your first home, it might finally be here.
The Ontario government has announced a proposal that could save first-time home buyers tens of thousands of dollarson the purchase of a new home or condo — and when combined with other programs, total savings could reach up to $130,000.
In a market where condo prices are already at their lowest in years, this new rebate could make the difference between continuing to rent or finally owning your first home.
Here’s what’s changing, how it works, and why the timing matters.
What Exactly Is the HST Rebate — and How It Works
When you buy a newly built home or condo in Ontario (directly from a builder), you normally pay HST — the Harmonized Sales Tax — on top of the price.
That total HST is 13%, which includes:
5% federal portion (GST)
8% provincial portion (PST)
Until now, first-time buyers had to pay the full HST and could only recover a small portion through limited rebates. That often added $60,000 to $100,000 in extra cost — a major barrier to ownership.
The New Change
The Ontario government is now proposing to fully rebate the 8% provincial portion of the HST for first-time buyerspurchasing a newly built home or condo valued up to $1 million.
That means:
You won’t pay the 8% provincial tax, saving up to $80,000 on a $1 million home.
You’ll still pay the 5% federal portion, but may qualify for the federal GST new-home rebate.
When stacked with other programs (like the Land Transfer Tax refund, FHSA, and HBP), you could save up to $130,000 in total.
Example 1: A New $800,000 Condo
| Item | Before (No Rebate) | After (8% Provincial Rebate) |
|---|---|---|
| Purchase Price | $800,000 | $800,000 |
| HST – Total (13%) | $104,000 | — |
| Federal Portion (5%) | $40,000 | $40,000 |
| Provincial Portion (8%) | $64,000 | Rebated |
| Total Tax Paid | $104,000 | $40,000 |
| Your Direct Savings | — | $64,000 |
Note: Example for illustration only. Figures rounded. Additional federal GST new-home rebate may further reduce the federal portion (eligibility/limits apply).
Example 2: A $1,200,000 Home
The rebate applies in full up to $1 million, then gradually phases out to $1.5 million.
Home price: $1.2 million
Provincial portion of HST (8%): $96,000
Rebate phase-out estimate: ≈ 40% rebated = $38,400 saved
Federal rebate (if eligible): ≈ $7,000
Combined savings: ≈ $45,000
Still a major cost reduction — and often enough to bridge the affordability gap for first-time buyers.
Why This Is a Big Deal
Buying a home in Ontario has become harder than ever, especially for first-time buyers in Toronto.
The cost of living, high interest rates, and tighter lending rules have kept many people out of the market. But this rebate changes the math in a big way.
1. It Directly Reduces the Price of Your Home
Removing the provincial 8% HST slice means you’re instantly paying less.
It’s not a loan or a deferral — it’s an immediate rebate.
On a $900,000 condo, that’s a $72,000 price cut.
2. It Makes New Homes More Affordable Than Resale
Until now, resale homes often seemed cheaper because they weren’t subject to HST.
Now, new construction — which comes with modern design, warranties, and energy efficiency — becomes competitive or even cheaper once you factor in the rebate.
3. It Helps First-Time Buyers Enter the Market
By rebating such a large portion of tax, Ontario is closing the gap between what you can afford and what’s available.
Combined with FHSA and HBP down-payment programs, homeownership is finally within reach.
4. It Energizes the Condo Market
Condo prices are already at their lowest point in years, and developers are offering better incentives and flexible deposits.
This rebate adds another layer of affordability — especially in Midtown and Uptown Toronto, where walkability, schools, and amenities make condo living a lifestyle choice, not just a financial one.
Who Qualifies
To benefit from the new provincial HST rebate, you must meet these conditions:
Be a first-time home buyer. You and your spouse/common-law partner have not owned a home anywhere in the world in the last four years.
Be a Canadian citizen or permanent resident.
Buy a new home or condo from a builder. Resale homes do not qualify.
Intend to live in the home as your primary residence.
Purchase price under $1 million for the full rebate (phase-out to $1.5 million).
Note: This information is provided for general understanding only and should not be taken as legal, tax, or accounting advice. Everyone’s situation is unique, and eligibility for any rebate or incentive depends on your personal circumstances and documentation. Always confirm details with your real estate lawyer, accountant, or financial advisor before making any purchase decisions.
How to Claim the Rebate
Step 1: Confirm Eligibility
Check that you meet all first-time buyer requirements. Your lawyer or accountant can confirm your status.
Step 2: Target New Homes and Condos
Look for new-build or preconstruction projects where the rebate applies.
Many builders are already highlighting this advantage in their pricing and marketing.
Step 3: Understand Your Budget
Work out your total cost after the rebate.
Subtracting the 8% provincial portion can drastically lower what you need to close or finance.
Step 4: Sign Your Agreement at the Right Time
The rebate will apply to agreements signed on or after the date the policy takes effect (after Ontario’s Fall Economic Statement is passed).
Step 5: File or Apply for the Rebate
Your builder or lawyer will apply the rebate at closing, showing it on your Statement of Adjustments, or guide you through submitting it directly.
Combined Savings Opportunities
| Ontario HST Rebate | Refunds the 8% provincial portion on most new homes up to $1M (phase-out above) |
|---|---|
| Potential Savings | Up to $80,000 |
| Federal GST New-Home Rebate | Rebates a portion of the 5% federal tax (sliding scale and eligibility rules apply) |
| Potential Savings | ~$6,000–$14,000 |
| Ontario Land Transfer Tax Refund | Provincial LTT refund for first-time buyers |
| Potential Savings | Up to $4,000 |
| Toronto LTT Rebate (if buying in Toronto) | City LTT rebate for first-time buyers |
| Potential Savings | Up to $4,475 |
| First Home Savings Account (FHSA) | Tax-advantaged down-payment savings |
| Contribution / Benefit | Up to $8,000/year contribution (tax-deductible) |
| Home Buyers’ Plan (HBP) | RRSP withdrawals toward down payment (per eligible buyer) |
| Withdrawal Limit | Up to $35,000 per buyer |
| Total Potential (Stacked) | Up to ~$130,000+ (varies by price, eligibility, and location) |
Actual savings vary by purchase price, program rules, and personal eligibility. Always confirm with your real estate lawyer and accountant.
Disclaimer: This is general information, not legal, tax, or accounting advice. Program details and eligibility can change. Verify with your real estate lawyer, accountant, or financial advisor before relying on any rebate or program.
Why Now Matters
The condo market is currently the most balanced it’s been in years:
Prices are down,
Inventory is up,
Builders are motivated,
And financing programs are expanding.
Add this 8% HST rebate, and it’s clear: if you’ve been saving and waiting, this could be your moment to enter the market before prices recover.
The Bottom Line
Ontario’s proposed HST rebate isn’t just a policy change — it’s a real opportunity.
By eliminating the provincial portion of HST on new homes up to $1 million, the province is giving first-time buyers the boost they’ve needed:
Lower upfront costs,
Easier entry into the market,
And the ability to own where you love to live.
With condo prices at multi-year lows and more inventory than ever, there’s finally breathing room for buyers to make smart, confident moves.
Disclaimer:
The information provided in this article is for educational and general informational purposes only. It does not constitute legal, tax, or accounting advice. Real estate transactions and rebate eligibility vary based on individual circumstances, purchase timing, and documentation.Always confirm your eligibility and details with your real estate lawyer, accountant, or financial advisor before making any purchase or relying on any rebate program.
Want to know how much you could save on your first condo?
Let’s calculate your savings and explore which new projects qualify for Ontario’s new HST rebate.
Call or text me (647) 277-4617 or email me hello@yolevski.com anytime.