Ontario’s enhanced HST rebate on new homes can remove up to $130,000 in tax from the price of a newly built home. It applies to purchase agreements signed with a builder between April 1, 2026 and March 31, 2027, and it is not limited to first-time buyers. For anyone considering a new-build bungalow, that window is now less than six months from closing.
Key takeaways
- The full 13% HST is rebated on new homes priced up to $1 million.
- The maximum relief is $130,000, and it phases down above $1.5 million.
- Your agreement with the builder must be signed by March 31, 2027.
- It applies to new homes bought as a primary residence, not resale bungalows.
- New single-family home sales in Ontario more than doubled after it launched.
How the enhanced HST rebate works
New homes in Ontario are subject to 13% HST, which is normally built into the builder’s price. Under the enhanced rebate, the federal and provincial portions are both relieved on eligible new homes, on a sliding scale by price.
| New home price | HST relief |
|---|---|
| Up to $1 million | Full 13% HST, up to $130,000 |
| $1 million to $1.5 million | Flat $130,000 |
| $1.5 million to $1.85 million | Declines from $130,000 to $24,000 |
| Over $1.85 million | $24,000 |
Two dates matter. The purchase agreement must be signed between April 1, 2026 and March 31, 2027, and construction of a primary residence must be substantially complete by December 31, 2031. There is a parallel version for new purpose-built rental properties with an earlier completion deadline.
Who qualifies
- Buyers of a newly built or substantially renovated home from a builder.
- The home must be intended as your primary residence, or that of a close relative.
- You do not need to be a first-time buyer.
- Resale homes do not qualify, because HST does not apply to them in the first place.
First-time buyers may also be able to use the separate federal first-time home buyers’ GST rebate, which covers agreements signed from March 20, 2025 to December 31, 2030. Ask your real estate lawyer how the two interact on your purchase.
What it has done to the new home market
The effect was immediate. Industry data compiled for the Ontario Home Builders’ Association and BILD showed 8,410 new homes sold in Ontario in the second quarter of 2026, up from 3,645 a year earlier. That is a 130% jump. Single-family homes made up 7,215 of those sales, while new condo sales stayed far below their ten-year average.
In plain terms, buyers are using the rebate on houses, not condos. That has pulled some demand away from the resale market, which is one reason resale activity has stayed soft this fall.
Why it matters for bungalow buyers
New bungalows and bungalofts are a small share of what builders offer, because a one-level home uses more land per square foot. Where they are built, they tend to be in adult-lifestyle communities and in towns outside the core GTA.
- The rebate narrows the gap. A new bungalow priced at $950,000 including HST carries roughly $109,000 of tax. Relief of that size changes the comparison with a resale home.
- Check how the builder prices it. Most builders quote prices with rebates already assigned to them. Ask for the price breakdown in writing and what happens if you do not qualify.
- Factor in closing costs. Development charges, utility hook-ups and upgrades can add up on a new build. Our guide to choosing a pre-construction bungalow lists what to ask.
- Resale still has advantages. Mature lots, established streets and no construction wait. See older bungalow vs new build.
Bungalow tip: If you want a new bungalow, start looking well before March 2027. One-level models are usually the first to sell out in a release, and you need a signed agreement inside the window.
Frequently asked questions
Does the HST rebate apply to a resale bungalow?
No. Resale homes are generally not subject to HST, so there is nothing to rebate. The program is for new construction and substantially renovated homes.
Can I get the rebate if I already own a home?
Yes, as long as the new home will be your primary residence and you meet the other conditions. It is not restricted to first-time buyers.
What if my new bungalow is delayed?
The key date for buyers is when the agreement is signed. Construction must be substantially complete by the end of 2031, which leaves a wide margin for typical delays. The Tarion new home warranty also sets rules on delayed closings.
Compare new and resale bungalows
The right choice depends on location, lot and timing as much as tax. Browse bungalows for sale across Ontario to see how resale prices compare with new-build offers in the areas you like.
This article is general information as of early October 2026, not legal, tax, mortgage or insurance advice. Rules and numbers change, so confirm the details for your situation with a licensed professional.
