If you sign a purchase agreement for a new townhouse in Ontario between April 1, 2026 and March 31, 2027, and you will live in it as your primary residence, you can get back the full 13% HST on homes priced up to $1 million, and a flat $130,000 on homes between $1 million and $1.5 million. Unlike earlier relief, this Ontario Enhanced New Housing Rebate is open to repeat buyers, move-up families and downsizers, not only first-time buyers.
Key takeaways
- The rebate covers the full 13% HST up to $130,000 on new homes used as a primary residence.
- The agreement must be signed from April 1, 2026 to March 31, 2027, so the window closes in about five and a half months.
- On an $899,900 new townhouse, a repeat buyer saves about $93,000 compared with the old $24,000 Ontario rebate.
- Most buyers assign the rebate to the builder, who credits it on the closing statement.
- First-time buyers under $1 million already had full HST relief; the big change is for everyone else.
What is the Ontario Enhanced New Housing Rebate?
The province announced the program in the 2026 Ontario Budget on March 25, and Bill 114, the HST Relief Implementation Act, received Royal Assent on May 12, 2026. The CRA published guidance in late June, and TRREB’s summary of the enhanced rebate confirms it is now in effect.
The rebate has two parts. The first is the 8% provincial portion of HST, up to $80,000. The second is a 5% “Ontario top-up” equal to the federal portion, up to $50,000, which Ontario reimburses. Together they remove up to $130,000 of HST from a new home.
Who qualifies
- An individual buying a new or substantially renovated home from a builder.
- The home must be intended as the primary place of residence of the buyer or a relation.
- The purchase agreement must be signed from April 1, 2026 to March 31, 2027.
- Construction must start by December 31, 2028 and be substantially complete by December 31, 2031.
That covers freehold townhouses, POTL townhouses and condo or stacked townhouses bought from a builder, as long as the occupancy test is met. Investors buying to rent should not assume they qualify; separate rules apply to rental housing.
How much is the HST rebate on a new townhouse?
The amount depends on the price. Here is how the tiers work, as described by TRREB.
| Purchase price | Enhanced rebate |
|---|---|
| Up to $1,000,000 | Full 13% HST, up to $130,000 |
| $1,000,000 to $1,500,000 | Flat $130,000 |
| $1,500,000 to $1,850,000 | Phased out based on price |
| $1,850,000 or more | Not eligible; existing Ontario rebate (up to $24,000) may apply |
For most new townhouses in the GTA, the first two rows are the ones that matter. Only larger luxury townhouses in prime Toronto pockets reach the phase-out range.
Worked examples: what a repeat buyer saves
Before this program, a buyer who had owned a home before could usually claim only the existing Ontario new housing rebate of up to $24,000. The federal GST new housing rebate phases out completely at $450,000, so it almost never helped in the GTA.
| New townhouse price | 13% HST | Enhanced rebate | HST left to pay | Saving vs old $24,000 rebate |
|---|---|---|---|---|
| $750,000 | $97,500 | $97,500 | $0 | $73,500 |
| $899,900 | $116,987 | $116,987 | $0 | $92,987 |
| $1,200,000 | $156,000 | $130,000 | $26,000 | $106,000 |
These figures treat the price as before HST, to show the tax clearly. In practice, Ontario builders usually quote prices that already include HST net of the rebates the buyer assigns to them. That makes the next point important.
Check how your builder’s price treats the rebate
Read the purchase agreement, or have your lawyer read it, with three questions in mind.
- Is the price “HST included, net of rebates”? If so, ask whether it already reflects the enhanced rebate or only the old $24,000 rebate. Two identical townhouses can look very different on paper depending on this wording.
- Will the builder credit the rebate at closing? The expected route is for you to assign both parts to the builder using Form GST190 with Schedule RC7190-ON. The builder then shows the credit on your statement of adjustments.
- What happens if you turn out to be ineligible? Many agreements make the buyer repay any rebate credited at closing if the occupancy test is not met. If you might rent the townhouse out instead of moving in, discuss that before you sign.
If the builder does not credit the rebate, you can pay the full 13% at closing and apply to the CRA yourself. That works, but it means carrying the cash until the refund arrives.
Tip: On a pre-construction freehold townhouse, the agreement you sign this winter decides your eligibility, even if you close in 2028. If you are choosing between two phases of the same community, a phase that releases after March 31, 2027 may not qualify. Ask the sales office for its release dates in writing.
First-time buyers: what changed and what did not
First-time buyers were already in a strong position. The federal First-Time Home Buyers’ GST/HST rebate, enacted on March 12, 2026, refunds the 5% federal portion up to $50,000 on new homes up to $1 million, phasing out between $1 million and $1.5 million. Ontario matched it by removing the 8% provincial portion for first-time buyers on homes up to $1 million, for agreements signed from March 20, 2025 to the end of 2030. The CRA’s first-time buyer rebate page has the federal rules.
So a first-time buyer purchasing an $899,900 townhouse could already have the full 13% removed. Where the enhanced program can matter for first-time buyers is above $1 million, where it pays a flat $130,000 while the first-time programs start to phase down. You cannot recover more HST than you paid, and how the programs interact is set out in CRA guidance, so ask your lawyer which application applies to you. TRREB notes the first-time program has different timelines and runs to 2031.
Pre-construction or a new townhouse already built?
The rebate is tied to buying from a builder, not to buying off a floor plan. A completed, never-occupied townhouse from builder inventory can qualify if the agreement is signed in the window and you move in. That can be attractive this year, because you know exactly what you are getting and when.
A resale townhouse does not qualify, even if it is only a year old. There is no HST on most resale homes to rebate. For a resale purchase the money questions are land transfer tax and financing, which our guide to the October 28 rate decision covers.
If you are weighing pre-construction, read our pre-construction townhouse buying page for how deposits, closing adjustments and occupancy dates work. If you already own a pre-construction townhouse you no longer need, our assignment sale page explains how assignments work; ask a lawyer how the rebate is treated for an assignee before relying on it.
Where the rebate helps most in the GTA
The rebate removes the biggest gap between new and resale townhouses for move-up and downsizing buyers. In communities with active new townhouse construction, such as Milton and Vaughan, compare a new unit’s HST-adjusted price with recent resale prices for similar townhouses. For context, TRREB’s September 2026 townhouse benchmarks were $603,200 in Milton and $747,300 in Vaughan, though new homes typically price above resale benchmarks.
Frequently asked questions
Can I get the $130,000 HST rebate if I already own a home?
Yes. The Ontario Enhanced New Housing Rebate is open to any eligible individual buying a new home from a builder as a primary residence, not only first-time buyers. You must sign the agreement between April 1, 2026 and March 31, 2027, and meet the construction and occupancy conditions. Selling your current home is not a stated requirement, but you must intend to live in the new one.
Does the enhanced HST rebate apply to condo townhouses?
It applies to new homes bought from a builder, and that includes condominium units such as condo or stacked townhouses, provided the buyer or a relation will live there as a primary residence. The same price tiers and dates apply. Check the agreement’s HST clause, because condo builders also quote prices net of rebates assigned to them.
What happens if I signed before April 1, 2026?
Agreements signed before April 1, 2026 fall outside the enhanced program’s window, according to TRREB’s summary. You may still qualify for the existing Ontario rebate of up to $24,000, and first-time buyers may qualify for the federal and Ontario first-time rebates. Do not cancel and re-sign an agreement to chase the rebate without legal advice.
How do I claim the HST rebate on a new townhouse?
Most buyers assign the rebate to the builder by completing Form GST190 with Schedule RC7190-ON, and the builder credits it on the closing statement. Alternatively, you can pay the full 13% HST at closing and apply directly to the CRA afterward. Your real estate lawyer will usually handle the forms with the builder’s lawyer.
Comparing new and resale options? Search townhouses across the GTA or ask our team to check a builder’s price against recent resale sales before you sign.
This article is general information as of October 2026, not legal, tax, mortgage or financial advice. Rules and numbers change, so confirm the details for your situation with a licensed professional.