| Member Update: HST Rebate Administration Resolved: Certainty Restored for New Home Sales June 22, 2026 OHBA is pleased to advise members that the federal and Ontario governments have now resolved the administrative issues related to processing the enhanced HST rebate for new homes. The required regulations have now been passed and are available for public viewing: Federal Regulation: P.C. 2026-610 Ontario Regulation: O. Reg. 196/26 The publication of these regulations provides the certainty and clarity that builders, purchasers, lawyers, lenders and sales teams have been waiting for since the enhanced rebate was announced on March 25, 2026. This is an important step forward for Ontario’s new housing market. It confirms how the enhanced HST relief program will be administered and allows new home sales to proceed with greater confidence and reduced transaction risk. Administration of the Enhanced HST Rebate for New Primary Residences For eligible purchasers acquiring a new home as a primary residence, purchasers should generally be encouraged to assign the HST rebate to the builder. This will allow the purchaser to benefit from a lower effective purchase price and, in practical terms, may reduce the amount the purchaser needs to finance through their mortgage. The administration process is expected to operate as follows: The builder will apply for the assigned rebate using the same portal currently used for the Ontario New Housing Rebate, including the existing rebate of up to $24,000. The Canada Revenue Agency, acting on behalf of both the federal and Ontario governments, will confirm eligibility using the same eligibility criteria that apply to the current New Housing Rebate. The CRA will review the rebate application submitted through the portal using form GST190 and, once eligibility is confirmed, will reduce the builder’s HST liability for the 8% provincial portion of the rebate. The CRA will update this form shortly with the new program information. No changes are expected to the existing associated schedule RC7190-ON. The portal now includes an additional section requiring the applicant to provide consent for the CRA to share the necessary information with the Ontario Ministry of Finance for the purpose of paying the 5% federal GST portion of the rebate to the builder. The CRA will provide Ontario’s Ministry of Finance with a monthly list of eligible 5% GST rebate payments. The Ministry has confirmed a service standard of issuing an electronic payment to the builder within 30 days. When a builder requests payment by cheque, the turnaround time will likely exceed the 30-day commitment. An infographic published by CRA of an example claim process can be found here. While assigning the rebate to the builder is expected to be the most efficient way to administer the rebate, purchasers may still elect to complete the transaction inclusive of HST and apply directly to the CRA for the rebate. Enhanced New Residential Rental Property Rebate (NRRPR) The Enhanced New Residential Rental Property Rebate will be administered in the same manner as before the March 25, 2026, announcement. Eligible new rental housing may qualify for a rebate of up to $130,000, provided the project meets the applicable criteria under the existing New Residential Rental Property Rebate (NRRPR) framework. More information on the NRRPR can be found here. Members should review the eligibility criteria and consult their tax, accounting and legal advisors to confirm how the enhanced rebate applies to specific rental housing projects. A Significant Advocacy Win for Housing Affordability The enhanced HST rebate is a major advocacy win for Ontario’s residential construction sector and an important affordability measure for new home purchasers. Since the March 25 announcement, more than 5,000 new home sales have occurred in Ontario that may not have otherwise proceeded. That represents more than one-third of all new home sales in Ontario in 2025 and demonstrates the immediate market impact of reducing the tax burden on new housing. However, while the policy announcement was welcome, the lack of clear administrative rules created three months of frustrating uncertainty for builders, purchasers, and the broader housing market. In that period, some purchasers became hesitant to proceed with new home purchases because agreements of purchase and sale increasingly included clauses requiring purchasers to cover the HST amount if the government did not ultimately rebate the amount back to the builder. At the same time, some builders began slowing sales because they were accruing potential HST liabilities that legal advisors cautioned could expose them to significant financial risk. The publication of the federal and provincial regulations resolves that uncertainty. OHBA appreciates the work of both the Government of Canada and the Government of Ontario in delivering this important affordability measure and resolving the administrative issue. We also recognize the continued efforts of members, local associations, and industry partners who helped reinforce the urgency of this issue with the government. OHBA and BILD’s joint advocacy throughout this process has been focused on ensuring that the rebate achieves its intended purpose: restoring affordability, supporting purchaser confidence, allowing builders to bring projects to market, and helping Ontario get housing starts moving again. Member Guidance Members should speak with their legal, accounting, and tax advisors to confirm how this administrative resolution affects: Agreements of purchase and sale; Disclosure language; Accounting and tax treatment; Purchaser communications; Mortgage and lender communications; and Sales processes. Members should also ensure their internal sales, finance and legal teams understand the updated administrative process, particularly the consent requirement for sharing information between the CRA and Ontario Ministry of Finance to support payment of the 5% federal portion of the rebate. OHBA & BILD will continue to closely monitor implementation and keep members informed of any further technical guidance or administrative details as they become available. The Ontario government will continue to provide updated guidance on both the enhanced NHR and NRRPR programs on the Ministry of Finance website. This is a positive and important step forward. The enhanced HST rebate has already helped re-engage purchasers in the new home market. With administration now clarified, the industry can proceed with renewed confidence and continue working to deliver the new homes Ontario families need. For additional details, please contact Scott Andison or Kirstin Jensen. |
HST Resolved
