Unlike resale homes, new-construction homes and condos in Ontario are subject to HST (13% — the 5% federal GST portion plus 8% provincial). Very few buyers actually pay the full 13%, though, because of the GST/HST New Housing Rebate system. Here’s the mechanism, in plain terms.

The Two-Part Rebate

The rebate has a federal component (a portion of the 5% GST) and an Ontario component (up to 75% of the 8% provincial portion, capped at $24,000). Combined, these rebates significantly reduce the effective HST cost on a new home — which is why the prices builders advertise for owner-occupied pre-construction homes are typically shown “net of rebate,” i.e. already reflecting the reduction.

If You’re Buying to Live In It

For owner-occupied purchases, the builder usually applies the rebate directly and credits it against your purchase price at closing — you generally don’t have to apply for anything yourself, and the price on your purchase agreement already reflects it. This is the most common scenario for buyers registering with us for a primary residence.

If You’re Buying as an Investment

This is where it changes. If you’re buying a pre-construction condo to rent out rather than live in, the builder-assigned rebate generally doesn’t apply the same way — investors typically have to pay the full HST amount at final closing, then separately apply for the New Residential Rental Property Rebate (NRRPRP) afterward to recover it. This means investors should budget for a larger amount due at closing than the “net” price they saw when they signed, with the rebate coming back later once the application is processed — and the property generally needs to be held as a rental (with a qualifying one-year lease) to qualify.

Why This Trips Up Buyers

The marketing price for a unit is almost always shown net of the owner-occupier rebate, regardless of your actual intent. If you’re buying as an investor, it’s important to budget for the HST difference at closing rather than assuming the advertised price is your final number — this is one of the most common surprises we see investor clients run into if they haven’t been walked through it in advance.

Rules Change — Confirm the Current Numbers

Rebate thresholds and eligibility rules are set federally and provincially and are periodically adjusted in budgets. The mechanism described here (owner-occupier vs. investor treatment) has been stable for years, but exact dollar caps and thresholds should always be confirmed with your real estate lawyer or accountant before you sign — not assumed from a blog post, including this one.

How We Help

When you register with GoodwinHomes.ca, we flag whether a project’s advertised pricing is net of the owner-occupier rebate or not, and make sure investor clients go in with accurate closing-cost expectations from day one.