Ontario has introduced a temporary enhanced rebate that can significantly reduce the HST cost of purchasing or building a new home in the province.
The Ontario Enhanced New Housing Rebate (ENHR), together with the existing Ontario new housing rebate, can provide eligible individuals with relief of up to $80,000 of the 8% provincial portion of HST paid on a new or substantially renovated home. The rebate applies to qualifying homes valued at less than $1.85 million.
How Much Is the Rebate?
| New Home Value | Combined Ontario Rebate |
| Up to $1 million | All of the 8% provincial portion of HST paid, up to $80,000 |
| Above $1 million to $1.5 million | $80,000 |
| Above $1.5 million and below $1.85 million | Partial rebate |
| $1.85 million and above | ENHR is not available; the existing Ontario new housing rebate of up to $24,000 may still apply |
For example, an eligible individual purchasing a new home for $1.2 million could qualify for the full $80,000 combined Ontario rebate, subject to meeting all eligibility requirements.
Who May Qualify?
The ENHR applies to several different ways of acquiring or constructing a home, with different timing requirements:
| Situation | Key ENHR Requirements |
| New or substantially renovated home purchased from a builder | The agreement of purchase and sale generally must be entered into between April 1, 2026 and March 31, 2027. Construction must begin by December 31, 2028 and be substantially completed by December 31, 2031. The purchase price, before HST, must be less than $1.85 million. |
| Owner-built home | Construction must generally begin between April 1, 2026 and March 31, 2027 and be substantially completed by December 31, 2029. The fair market value when substantially completed must be less than $1.85 million. |
| Substantially renovated home | Similar timing and value requirements apply depending on whether the home is purchased from a builder or substantially renovated by the homeowner. |
For the ENHR, the home must generally be intended as the primary place of residence of the purchaser or a qualifying relation.
What Counts as a Substantial Renovation?
For GST/HST housing rebate purposes, a substantial renovation generally requires 90% or more of the existing interior to be removed or replaced, excluding certain structural components such as the foundation, supporting walls, floors, roof and staircases.
Additional Federal HST Relief May Be Available
Individuals who qualify for the ENHR may also qualify for the Ontario New Home Affordability Payment (ONHAP). The ONHAP is administered by the Province of Ontario and can provide up to $50,000, equivalent to up to 100% of the 5% federal portion of HST paid on a qualifying new or substantially renovated home.
Applying for the Rebate
The application process depends on whether the home was purchased from a builder or was owner-built or substantially renovated. Homebuyers remain responsible for ensuring they qualify.
Planning a New Home Purchase or Major Renovation?
The Ontario Enhanced New Housing Rebate can provide significant HST savings, but eligibility depends on the type and value of the property, how it will be used, and when the purchase agreement or construction occurs.
If you are purchasing, building or substantially renovating a home and would like to understand how the new rebate rules may apply to your situation. To receive insights like this directly, follow us on LinkedIn and subscribe to our blog for regular updates on legislation, compliance changes, and strategic accounting guidance that impact privately owned businesses across Canada.
