First-Time Buyer's Guide to New-Build Incentives in Ontario (2026)

If you are buying your first home and considering a new build, 2026 is a year worth understanding carefully. Between a new federal rebate and a temporary Ontario program, eligible buyers of newly constructed homes can now recover a significant portion of the sales tax on their purchase — in some cases up to $130,000 combined.

That number gets attention, and it should. But these programs have specific rules, specific windows, and specific definitions of who qualifies. This guide walks through what each program offers, who it is for, and the steps to take before you count on any of it.

One important note before we begin: I am a REALTOR®, not a tax professional or accountant. Everything below reflects the programs as published by the Canada Revenue Agency and the Ontario government. Before you make an offer that depends on a rebate, talk to your lender and your accountant and confirm your own eligibility.

What is the federal GST rebate for first-time buyers?

The federal First-Time Home Buyers' GST/HST Rebate allows eligible first-time buyers to recover the GST — or the federal portion of the HST — paid on a newly built or substantially renovated home. It was enacted through Bill C-4, which received Royal Assent on March 12, 2026, and the Canada Revenue Agency is now accepting applications.

Here is how the amounts work, according to the CRA:

• New homes valued at or below $1 million: the rebate covers up to 100% of the GST paid, to a maximum of $50,000.
• New homes valued between $1 million and $1.5 million: the maximum rebate is gradually reduced. The CRA's own example: a $1.25 million home, the midpoint of that range, qualifies for 50% of the maximum — a $25,000 rebate.
• New homes valued at $1.5 million or more: no rebate.

The rebate applies to agreements of purchase and sale entered into on or after March 20, 2025, and before 2031. The home must be newly constructed or substantially renovated, and it must be for your primary place of residence.

Who counts as a first-time home buyer for the federal rebate?

The CRA's general definition: you are considered a first-time home buyer if you did not live in a home — inside or outside Canada — that you owned, or that your spouse or common-law partner owned, in the calendar year of purchase or the four preceding calendar years. You must also be at least 18 years old and a Canadian citizen or permanent resident.

If you are unsure whether you meet this definition — for example, after a separation, or if you previously owned property abroad — confirm it with your accountant before assuming you qualify. This is one of the areas where buyers most often get tripped up.

What is Ontario's expanded HST relief, and how does the $130,000 figure work?

Ontario introduced a temporary expansion of HST relief on new homes, delivered through two components that work together. Combined, they can effectively relieve the full 13% HST on a qualifying new home valued up to $1 million — up to $130,000.

Component 1: The Ontario Enhanced New Housing Rebate (ENHR) — up to $80,000, covering the 8% provincial portion of the HST. It is administered by the Canada Revenue Agency. An important point many buyers miss: the ENHR is not limited to first-time buyers. Repeat buyers can qualify, provided the home is new or substantially renovated, used as a primary residence, and the agreement of purchase and sale was signed between April 1, 2026 and March 31, 2027.

The ENHR scales with the home's value: full relief of the 8% provincial portion (up to $80,000) on homes up to $1 million; a flat $80,000 on homes between $1 million and $1.5 million; partial relief between $1.5 million and $1.85 million; and no ENHR at $1.85 million or above.

Component 2: The Ontario New Home Affordability Payment (ONHAP) — up to $50,000, covering the 5% federal portion of the HST. It is administered by Ontario, and you must first be eligible for the ENHR to receive it. The ONHAP scales the same way: full relief up to $50,000 on homes up to $1 million, a flat $50,000 between $1 million and $1.5 million, partial relief up to $1.85 million, and none above that.

Can I claim both the federal rebate and the Ontario top-up?

This is where buyers need to pay close attention. Ontario's ONHAP payment is reduced by the federal portion of any HST rebate you are entitled to claim — including the federal First-Time Home Buyers' GST/HST Rebate. In other words, the federal 5% portion is covered once, through one route or the other. You do not get it twice.

Practically, this means a first-time buyer and a repeat buyer can end up with similar total relief on the same home — the first-time buyer receives the federal portion through the federal rebate, while the repeat buyer receives it through Ontario's ONHAP top-up. The combined ceiling remains up to $130,000 on a qualifying home valued up to $1 million. Your accountant can confirm exactly how this nets out for your purchase.

Do these programs apply to resale homes?

No. Neither the federal rebate nor Ontario's expanded relief applies to resale properties. HST is not charged on the sale price of a previously owned home, so there is nothing to rebate. These programs are for newly constructed homes — or substantially renovated ones — purchased from a builder, or built by the owner.

On "substantially renovated": the CRA's test is strict. Generally, 90% or more of the interior of the existing housing must be removed or replaced. A cosmetic update does not qualify.

How do I actually receive the rebate?

In many builder purchases, the builder credits the rebate amount against what you owe at closing — the same way the long-standing GST/HST new housing rebate has worked. If the builder does not credit it, you apply directly to the CRA using Form GST190 (with the Ontario schedule RC7190-ON for the provincial portion). There is generally a two-year window to apply after taking ownership, so do not leave it sitting.

For Ontario's ONHAP top-up, no separate Ontario application is required. When you complete the ENHR forms, a consent section allows the CRA to share your information with Ontario so the top-up can be administered.

What about the old First-Time Home Buyer Incentive I heard about?

This is a common source of confusion, so let us be clear. The First-Time Home Buyer Incentive — the federal shared-equity program launched in 2019, where the government contributed 5% or 10% toward the purchase in exchange for a share of the home's equity — was discontinued. CMHC announced the wind-up in February 2024, no new applications were accepted after March 21, 2024, and no new approvals were granted after March 31, 2024.

That program no longer exists for new applicants. The rebates described in this guide are entirely separate programs. If someone mentions "the incentive" to you, make sure you both mean the same thing.

What should I do before making an offer on a new build?

First, get pre-approved and tell your mortgage professional you intend to buy new construction — the rebate changes your effective cost, and your lender should model it. Second, have your accountant confirm your eligibility under each program, especially the first-time buyer definition and the no-double-dipping rule on the federal portion. Third, ask the builder directly whether they credit the rebate at closing or expect you to claim it yourself — get the answer in writing.

And work with a REALTOR® who understands new construction. Builder contracts, upgrade pricing, closing adjustments, and occupancy periods all work differently from resale transactions. The rebate is valuable, but it is only one part of a new-build purchase done well.

Frequently asked questions

How much can a first-time buyer save on a new home in Ontario in 2026?
On a qualifying new home valued up to $1 million, combined federal and Ontario relief can reach up to $130,000 — up to $50,000 of the federal GST/HST portion and up to $80,000 of Ontario's provincial portion. Exact amounts depend on the home's value and your eligibility under each program.

Do I have to be a first-time buyer to get Ontario's expanded rebate?
No. Ontario's Enhanced New Housing Rebate (up to $80,000) and the ONHAP top-up (up to $50,000) are available to eligible buyers whether or not they have owned before, as long as the agreement was signed between April 1, 2026 and March 31, 2027 and the home is a new or substantially renovated primary residence.

Does the rebate apply to resale homes?
No. These programs apply only to newly constructed or substantially renovated homes. Resale homes are not subject to HST on the sale price.

What happened to the First-Time Home Buyer Incentive?
The federal shared-equity First-Time Home Buyer Incentive was discontinued in 2024. It is a separate, closed program — not to be confused with the current GST/HST rebates.

Should I rely on the rebate when deciding what I can afford?
Use it in your planning, but confirm it first. Have your lender and accountant verify your eligibility and the expected amount before you make an offer that depends on receiving it.

Heather Harding is a REALTOR® with Real Broker Ontario Ltd., Brokerage, serving Toronto, Etobicoke, Peel, York, Simcoe and the GTA. Considering a new build? Let's talk through the incentives and the purchase together — 647-964-5404 or propertyhuntwithheather@gmail.com. I do business with everyone that has a pulse.