New GST Rebate In Ontario Of Up To $130,000 For FTHB

Last Updated On 10 November 2025, 11:56 AM EST (Toronto Time)

On November 6, 2025, the Ontario government proposed a powerful new housing incentive as part of its 2025 Fall Economic Statement: a full rebate of the 8% provincial portion of the HST for first-time home buyers (FTHB) on newly built or substantially renovated homes valued up to $1 million.

When combined with the federal government’s proposed 5% GST rebate for first-time home buyers (FTHB), the total savings could reach as much as $130,000.

The new provincial rebate aims to make homeownership more attainable, stimulate new-home construction, and reinforce the long-term affordability strategy.

Ontario’s New GST Rebate Explained

Under this new measure, first-time home buyers who purchase a new or substantially renovated home would qualify for a rebate covering the entire 8% provincial HST portion on homes priced up to $1 million.

For homes valued between $1 million and $1.5 million, the rebate would gradually phase out to ensure fairness, with a minimum relief of $24,000 on homes priced between $1.35 million and $1.5 million.

This new program builds on the province’s existing HST New Housing Rebate, which already offers up to $24,000 in relief.

Combined, both rebates would provide the equivalent of a full refund of the provincial 8% HST for qualifying new homes.

Meanwhile, the federal government’s proposed First-Time Home Buyers’ GST/HST Rebate would refund the entire 5% federal portion of the HST on new homes up to $1 million.

This will gradually reduce between $1 million and $1.5 million. Homes at or above $1.5 million would not be eligible for the federal rebate.

Together, these measures would make the total tax savings for a qualifying first-time home buyer reach up to $130,000 — a game-changing step for many Ontarians struggling with housing costs.

Why Ontario Is Launching This Rebate

The Ford government says the proposal is part of its broader effort to “protect Ontario, lower costs, and help more families realize the dream of homeownership.”

With home prices and borrowing costs continuing to strain budgets, the rebate is designed to:

• Lower the effective purchase cost of a new home for first-time buyers.
• Encourage construction of new homes and major renovations across the province.
• Support skilled trades and builders by driving demand for new developments.
• Complement the federal rebate and ensure the families benefit from both federal and provincial relief.

The Minister of Finance, Peter Bethlenfalvy, said the new rebate would “save families money on one of the biggest financial transactions of their lives,” while Minister of Municipal Affairs and Housing Rob Flack emphasized that it would help more people “bring the dream of homeownership within reach.”

The rebate aligns with the province’s massive infrastructure investments, including the $4 billion Municipal Housing Infrastructure Program and the $1.2 billion Building Faster Fund, both aimed at accelerating home construction and affordability.

GST Rebate Eligibility For FTHB

To qualify for the new Ontario GST rebate, buyers must meet both provincial and federal requirements.

Although the program is not yet active, the eligibility framework is expected to mirror the federal guidelines for the First-Time Home Buyers’ GST/HST Rebate.

Key eligibility criteria include:

• First-time home buyer requirement:
  You must be at least 18 years old and a Canadian citizen or permanent resident, and you must not have lived in a home you or your spouse or common-law partner owned in the calendar year of purchase or the previous four calendar years.
• Type of home:
  The home must be newly built or substantially renovated. It can be a detached house, townhouse, condominium, mobile home, modular home, or floating home.
• Purpose of the home:
  The home must be used as your primary place of residence. Investment or rental properties do not qualify.
• Purchase price limits:
  • Homes valued up to $1 million qualify for a full rebate of both provincial and federal HST portions.
  • Homes between $1 million and $1.5 million qualify for a reduced rebate.
  • Homes over $1.5 million are not eligible.
• Agreement and construction timeline:
  • The agreement of purchase and sale with the builder must be entered into on or after May 27, 2025, and before 2031.
  • Construction or substantial renovation must begin before 2031 and be substantially completed before 2036.
  • Ownership must be transferred before 2036.
• Occupancy:
  You or your spouse/common-law partner must be the first to occupy the home as a residence.
• Previous claims:
  Neither you nor your spouse/common-law partner may have previously received a First-Time Home Buyers’ GST/HST Rebate.

These criteria ensure that the rebate targets genuine first-time buyers investing in their first principal residence and not repeat or speculative purchasers.

When Will Applications For GST Rebate Open

Although both the federal and provincial governments have announced their intention to offer these rebates, applications are not yet open because of the necessary federal legislation.

Bill C-4, An Act Respecting Certain Affordability Measures For Canadians And Another Measure—has not yet received Royal Assent.

Bill C-4 was introduced in the House of Commons on June 5, 2025, and successfully passed second reading on June 12, 2025 with overwhelming support:

• Yeas: 335
• Nays: 0
• Paired: 6
• Total votes: 341

Following its committee review, the bill was reported back to the House with amendments on October 29, 2025, and now awaits its final legislative stages before Royal Assent.

Given this bipartisan backing and absence of opposition, experts and policymakers believe the bill faces no foreseeable roadblocks and will almost certainly pass in the coming weeks.

Once it becomes law, the Canada Revenue Agency will publish detailed claim procedures, updated forms, and implementation dates.

Ontario will then finalize its matching rebate program shortly thereafter.

Timeline summary:

• First reading: June 5, 2025
• Second reading (approved): June 12, 2025
• Committee review completed: October 29, 2025
• Next step: Final approval and Royal Assent (expected late 2025)
• Applications open: After Royal Assent and CRA publication of updated forms

This means first-time buyers signing a purchase agreement from May 27, 2025 onward will likely be able to apply once the legislation is enacted — expected before the start of the 2026 housing season.

How To Apply For The GST Rebate?

Once the legislation receives Royal Assent and the CRA activates its new rebate system, eligible home buyers will be able to apply for both the federal and Ontario provincial rebates.

Here is what the process will look like:

1. Purchase your new or substantially renovated home
   • Enter into an eligible agreement of purchase and sale on or after May 27, 2025, for a newly built or substantially renovated home valued within the eligible range.
   • Pay the full HST-inclusive purchase price to the builder at closing. The rebate is not an upfront discount; you will apply afterward to receive the refund.
2. Confirm your eligibility
   • Ensure that you meet all first-time buyer and occupancy requirements.
   • The home must be used as your principal residence, and you or your partner must not have owned a home in the past four calendar years.
3. Wait for official CRA forms and provincial updates
   • The CRA will update the following forms once the rebate becomes law:
     • Form GST190 – GST/HST New Housing Rebate Application for Houses Purchased from a BuilderForm RC7190-WS – GST190 Calculation WorksheetForm GST191 – GST/HST New Housing Rebate Application for Owner-Built HomesForm GST191-WS – Construction Summary WorksheetGuide RC4028 – GST/HST New Housing Rebate Guide
   These will be revised to include the new First-Time Home Buyers GST/HST Rebate section and corresponding Ontario rebate option.
4. Submit your application
   • Once the updated forms are available, you can file your claim directly with the CRA.
   • Builders may only credit the existing new-housing rebate until the new program becomes law. After Royal Assent, the additional first-time-buyer rebate can be claimed through the CRA portal or by mail.
5. Processing and refund
   • The CRA will verify your eligibility and issue the refund once approved. Processing times are expected to align with existing new-housing rebate timelines.
   • For the Ontario portion, the Ministry of Finance will release guidance on whether the provincial share will be automatically coordinated with the CRA or require a separate claim form.
6. Keep your documentation
   • Retain copies of your purchase agreement, builder invoices, proof of HST payment, and occupancy evidence. These documents will be required to support your claim.

Important note:
If you purchase a home before the legislation is enacted, you must still pay the full HST.

You will then apply for the rebate after Royal Assent. Builders cannot apply the rebate as a credit at closing until the law officially takes effect.

Not An Upfront Discount — A Refund After Purchase

Many home buyers mistakenly assume the new rebate will reduce the purchase price immediately. In reality, this is a post-purchase refund, not an upfront discount.

Buyers must pay the full HST-inclusive price at the time of purchase.

The rebate — provincial and federal — is then claimed and refunded later by the CRA or Ontario Ministry of Finance once eligibility is verified.

This means you’ll need financing for the entire purchase amount initially.

The refund serves as a significant tax relief afterward, but it will not automatically lower your mortgage or reduce your upfront down payment at closing.

Example of How Much You Could Save

• Scenario 1: A new home priced at $850,000
  • Federal GST rebate: 5% = $42,500
  • Provincial HST rebate: 8% = $68,000
  • Total potential rebate: $110,500
• Scenario 2: A new home priced at $950,000
  • Full rebate still applies because it is under $1 million.
  • Combined federal and provincial relief ≈ $120,000 to $125,000
• Scenario 3: A new home priced at $1.25 million
  • Federal rebate reduced to about 50% ($25,000)
  • Provincial rebate partially phased down (approx. $40,000 to $50,000)
  • Total combined rebate: ≈ $70,000 to $75,000

Pro Tip: Mostly realtors get 2-3% commission from the builder so ask your realtor if they can refund part of their commission to maximize your savings.

These examples show how the savings scale down for higher-priced homes but remain substantial across most of Ontario’s first-time-buyer segment.

Why This Rebate Could Transform Housing Market

The proposed GST/HST rebate has both economic and social implications:

• Affordability relief: With average home prices still high and mortgage rates elevated, a tax refund of up to $130,000 is a lifeline for young families and newcomers hoping to own a home.
• Boost to new construction: By targeting new builds and substantial renovations, the rebate stimulates the housing supply pipeline, helping Ontario reach its ambitious housing targets.
• Employment growth: More housing activity means more work for trades, contractors, and suppliers across the province.
• Regional balance: The measure could drive demand toward regions where new homes are still available under the $1 million threshold, spreading economic benefits beyond major cities.
• Confidence in policy alignment: Because the provincial program mirrors the federal initiative, there is little regulatory uncertainty once Bill C-4 receives Royal Assent.

Experts anticipate the combined rebate will enhance first-time buyer confidence and stimulate the market in early 2026 as applications open.

The new proposed GST/HST rebate of up to $80,000 — paired with the federal rebate worth up to $50,000 — marks one of the most significant housing affordability initiatives in recent years.

Together, these programs could cut the tax burden on a new home by up to 13%, offering new hope to thousands of Ontarians dreaming of homeownership.

With Bill C-4 already sailing through Parliament with near-unanimous support and no visible barriers ahead, first-time buyers can confidently expect applications to open soon after Royal Assent.

While the rebate is not an immediate discount at closing, it will deliver substantial financial relief through refunds once approved.

For families waiting to step into their first home, this rebate represents a transformative policy that makes the dream of ownership not just possible — but finally within reach.

New HST/GST Rebate Frequently Asked Questions (FAQs)

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