Ontario’s 2025 GST/HST Rebate: A Game-Changer for First-Time Home Buyers
Ontario’s housing market is set for a major shift following the government’s 2025 Fall Economic Statement. On November 6, 2025, the province announced a full rebate of the 8% provincial portion of the HST for first-time home buyers (FTHBs) on new or substantially renovated homes valued up to $1 million.
When combined with the federal 5% GST rebate, the total savings could reach as much as $130,000 — a significant boost for Ontarians struggling to afford their first home.
This initiative is part of Ontario’s broader housing affordability strategy aimed at helping more families achieve homeownership while stimulating construction across the province.
Understanding the New Ontario GST/HST Rebate
The Ontario GST/HST rebate fully covers the 8% provincial HST portion for first-time buyers purchasing:
- Newly built homes
- Substantially renovated homes valued up to $1 million
For homes between $1 million and $1.5 million, the rebate will gradually phase out, ensuring fairness across different income levels.
Meanwhile, the federal rebate refunds the full 5% GST on homes up to $1 million, also reducing between $1 million and $1.5 million.
This means that an Ontario first-time home buyer could receive up to a 13% total tax refund when combining both programs.
Why Ontario Introduced the GST Rebate in 2025
The rebate is part of Ontario’s plan to address affordability, encourage new home construction, and support local trades.
According to Finance Minister Peter Bethlenfalvy, this program will “save families money on one of the biggest financial transactions of their lives.”
The initiative supports multiple objectives:
- Reducing the effective cost of a new home for first-time buyers
- Encouraging builders to construct more affordable housing
- Strengthening Ontario’s skilled trades and construction sector
- Aligning with federal housing affordability measures
The rebate complements major housing programs like the $4 billion Municipal Housing Infrastructure Program and the $1.2 billion Building Faster Fund, both aimed at expediting housing construction.
Who Qualifies for the Ontario GST/HST Rebate
To qualify for the rebate, first-time home buyers must meet both federal and provincial eligibility requirements.
Key Eligibility Criteria
1. First-Time Buyer Status
You must be:
- At least 18 years old
- A Canadian citizen or permanent resident
- Someone who has not owned or lived in a home you (or your partner) owned during the current year or the previous four calendar years
2. Type of Property
- The home must be newly built or substantially renovated
- Eligible property types include detached houses, condos, townhouses, modular homes, mobile homes, and floating homes
3. Purchase Price Limit
- Full rebate: homes priced up to $1 million
- Partial rebate: homes priced between $1 million and $1.5 million
- No rebate: homes above $1.5 million
4. Use of Property
- The home must be used as your primary residence
- Investment or rental properties are not eligible
5. Agreement and Construction Deadlines
- The purchase agreement must be signed on or after May 27, 2025
- Construction or renovation must begin before 2031 and be completed before 2036
- The property must be transferred to the buyer before 2036
When Applications Will Open
The rebate is tied to Bill C-4 — An Act Respecting Certain Affordability Measures for Canadians.
As of November 2025, the bill has passed second reading and committee review, with no opposition expected. Final approval and Royal Assent are anticipated before the end of 2025.
Once the bill becomes law:
- The Canada Revenue Agency (CRA) will publish the application forms
- Ontario will finalize its provincial rebate framework
- Applications will open shortly afterward, likely in early 2026
Legislative Timeline
- First Reading: June 5, 2025
- Second Reading: June 12, 2025 (approved 335–0)
- Committee Review Completed: October 29, 2025
- Royal Assent Expected: Late 2025
How to Apply for the GST/HST Rebate
Once applications open, here’s what buyers will need to do:
Step 1: Purchase an Eligible Property
Sign an agreement with a builder on or after May 27, 2025, for a home priced within the eligible range.
Step 2: Pay Full HST at Closing
You must pay the full HST-inclusive purchase price at closing — the rebate is not deducted upfront.
Step 3: Gather Required Forms and Documents
When active, the CRA will update the following forms:
- GST190 – New Housing Rebate (purchased from a builder)
- RC7190-WS – Calculation Worksheet
- GST191 – Owner-Built Homes
- GST191-WS – Construction Summary Worksheet
- RC4028 – Rebate Guide
Step 4: Submit Application to CRA
You’ll submit your rebate claim through the CRA portal or by mail, along with supporting documents like your purchase agreement, HST payment proof, and occupancy details.
Step 5: Wait for Refund
After verification, CRA and the Ontario Ministry of Finance will issue your refund. Processing times are expected to match existing new-housing rebate timelines.
Important Clarification: This Is a Refund, Not a Discount
Many buyers assume the rebate will lower the purchase price upfront. However, this is a post-purchase refund.
You must finance the full HST-inclusive cost at the time of purchase, then receive the rebate as a refund once approved.
This refund does not lower your mortgage or closing costs immediately — but it provides substantial financial relief afterward.
How Much You Can Save: Real Examples
| Home Price | Federal GST Rebate | Provincial HST Rebate | Total Savings |
|---|---|---|---|
| $850,000 | $42,500 | $68,000 | $110,500 |
| $950,000 | $50,000 | $75,000 | $125,000 |
| $1.25 million | $25,000 | $45,000 | $70,000 |
Pro Tip: Many builders offer incentives and realtors earn 2–3% commission — negotiate to get a rebate on those fees to further boost your savings.
Why This Rebate Could Transform Ontario’s Housing Market
- Affordability Boost: Reduces the overall tax burden for first-time buyers
- Increased Supply: Encourages construction of new and renovated homes
- Job Growth: Supports Ontario’s trades and construction industry
- Regional Balance: Expands opportunities in suburban and rural areas with lower home prices
- Market Confidence: Aligns provincial and federal policies, giving buyers clarity and predictability
With federal and provincial support, this combined GST/HST rebate could reshape affordability across Ontario’s housing landscape starting in 2026.
Frequently Asked Questions (FAQs)
1. What is Ontario’s new GST rebate for first-time buyers?
It’s a housing incentive refunding the full 8% provincial HST portion for first-time home buyers purchasing newly built or substantially renovated homes up to $1 million. Combined with the federal 5% GST rebate, total savings can reach $130,000.
2. When can I apply for the rebate?
Applications will open after Bill C-4 receives Royal Assent, expected by late 2025. The CRA will then release updated forms and application procedures.
3. Can I get the rebate on a resale home?
No. The rebate applies only to newly built or substantially renovated homes. Resale or investment properties are not eligible.
4. Do I get the rebate immediately at closing?
No. You must first pay the full HST, then apply for a refund afterward through the CRA or Ontario Ministry of Finance once eligibility is confirmed.