The HST rebate on a new build, and who pays it back.

A builder’s advertised price almost always includes HST and already assumes they will claim your new housing rebate. If you qualify, that is invisible and costs you nothing. If you are buying to rent it out, the same rebate lands back on your closing statement in cash — commonly tens of thousands, years after you signed.

The purchase

Price in the agreement $

How is that price stated?

Who will live in it?

Before you sign

The question to ask
at the sales office.

“Is the price HST-included and net of the rebate, and does the agreement assign the rebate to the vendor?” If the answer is anything other than a clear yes or no in writing, stop and have a lawyer read the agreement before you sign. The difference between the two answers is six figures.

Why the federal rebate is usually nil

The federal GST new housing rebate is 36% of the GST, capped at $6,300, and it phases out to nothing at $450,000 of pre-tax price. Those thresholds have not moved since 1991. On any current Halton purchase the federal portion is gone entirely, and the Ontario rebate — 75% of the provincial 8%, capped at $24,000 — is the whole story.

If you are buying it as a rental

An investment property does not qualify for the new housing rebate, so the builder cannot claim it and the amount goes back onto your closing statement in cash. You generally recover it afterwards through the New Residential Rental Property rebate — but only after closing, only with a signed lease of at least one year, and only by filing for it within two years. You fund the clawback first and recover it months later. A mortgage will not cover that gap; plan for it.

If you plan to assign before closing

You never take title and never occupy, so no new housing rebate is available to you at all. Since May 2022 assignment sales of new housing are treated as taxable, which means HST generally applies to your assignment profit as well — and the builder’s consent and assignment fee sit on top of that. Read the assignment clause before you sign, whether or not you plan to use it.

What the rebate does not cover

Development charges and municipal levies, Tarion enrolment, utility connections, law society levies, occupancy fee reconciliation and HST on upgrades are all separate, and none of them are in the builder’s advertised price. Ask for a written estimate of total closing adjustments before you sign, and ask which of them are capped. Build the full schedule ↗

Estimates for planning only, and not tax advice. HST treatment of new construction depends on facts a calculator cannot see — your intention at the time of signing, who goes on title, who occupies first, and what the agreement actually says. Confirm your position with an accountant and a real estate lawyer who do new construction, before you sign rather than after.

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The HST rebate on a new build, and who pays it back.

The purchase

The question to askat the sales office.

Other calculators worthten minutes of your time.

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The question to ask
at the sales office.

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ten minutes of your time.