Ontario Eliminates HST on New Home Construction — What Custom Home Buyers Need to Know
The Ontario government has eliminated the full 13% HST on eligible new construction homes, effective April 1, 2026. For homeowners planning a custom home build, this is one of the most significant financial developments in the residential construction market in years.
At Novacon Construction, we want to make sure our clients are informed and positioned to take full advantage of this opportunity.
The Key Facts
The rebate: Up to $130,000 back on the HST paid on a new home construction.
Who qualifies: Any eligible buyer — first-time and repeat buyers alike. You do not need to be a first-time purchaser.
What qualifies: New builds only. Custom homes, pre-construction condos, townhomes, and unsold new inventory. Resale properties do not qualify.
The primary residence condition: The home must be intended as the primary place of residence of the buyer or a relation. A purchase made purely as an investment does not qualify under this rebate. The rebate is also available to individuals rather than corporations or partnerships, and every co-owner must be an individual. If you are planning a build that will be held as an investment property, speak with your lawyer early — a parallel rebate exists for qualifying long-term rental housing, with its own construction and completion deadlines.
The window: Purchase agreements must be signed between April 1, 2026 and March 31, 2027. Construction must begin by December 31, 2028 and be completed by December 31, 2031.
This window closes March 31, 2027. It will not come back.
Rebate Amounts by Purchase Price
| Purchase Price | Maximum Rebate |
|---|---|
| Up to $1,000,000 | Up to $130,000 |
| $1,000,000 – $1,500,000 | Capped at $130,000 |
| $1,500,000 – $1,850,000 | Partial rebate |
| Above $1,850,000 | Minimum $24,000 |
How the Rebate Is Actually Claimed
One of the most practical questions homeowners ask is whether they need to find the HST up front and wait to be reimbursed. In most cases, no.
CRA forms for the enhanced rebate became available in mid-July 2026. Where they apply, the rebate can be assigned to the builder, who then credits both the 8% provincial and 5% federal portions against the purchase price at closing. The buyer never fronts that money.
For a custom home built under a design-build contract, this is worth raising with your lawyer and your builder early in the process, because how the agreement is structured affects how and when the relief is applied.
Additional Incentives for First-Time Buyers
First-time buyers can stack additional programs on top of this rebate:
- RRSP Home Buyers’ Plan — Withdraw up to $60,000 tax-free ($120,000 per couple) from your RRSP toward your first home
- First Home Savings Account (FHSA) — Save up to $40,000 with tax-free contributions and withdrawals
- TFSA savings — Can be applied to your down payment, tax-free
- Ontario Land Transfer Tax Rebate — Up to $4,000 back; an additional $4,475 for Toronto purchases
What This Means for Custom Home Clients
If you have been considering building a custom home in Toronto or the GTA, the combination of this rebate and existing incentive programs makes this one of the most financially advantageous moments to move forward.
For a custom home in the $1M–$1.5M range, the savings alone represent a significant reduction in your total project cost — and in some cases, enough to meaningfully change what’s possible within your budget.
Next Steps
This incentive applies to new builds — including custom homes built under a design-build contract. We strongly recommend speaking with your lawyer and accountant to confirm eligibility for your specific project.
If you have been thinking about building and want to understand how this rebate could affect your plans, we’re happy to have that conversation.
Schedule a consultation with Novacon Construction →
The enhanced rebate is now in force, retroactive to April 1, 2026. Eligibility can still turn on the wording of your purchase agreement, your closing and construction dates, intended occupancy, and CRA interpretation. Novacon Construction recommends working with a qualified lawyer and accountant to confirm eligibility before making decisions based on this relief. This article is intended as general information only and does not constitute financial, tax, or legal advice.
Experience the difference of what working with a real client-centric contractor specialist feels like.
- How Zoning Affects Your Home Addition Plans in Toronto - September 5, 2026
- Can You Remove a Load-Bearing Wall in a Toronto Home? What It Really Involves - September 5, 2026
- When Does a Renovation in Toronto Become a “Structural Project”? - September 5, 2026
