Up to $130,000 in HST Relief on a New Build…Here’s What We Know

Ontario has announced a major expansion of HST relief for new home construction, with potential combined provincial and federal savings of up to $130,000. If you’re considering building a custom home, the timing could be significant — but the final details matter.

The Headline Number

Up to $130,000. That’s the potential combined HST relief available to eligible buyers of newly built homes in Ontario under measures announced in the 2026 Ontario Budget and related federal housing-tax initiatives.

For context: HST on new construction in Ontario runs 13% — 8% provincial, 5% federal. On a $1 million home, that’s $130,000 in tax. If the full provincial and federal relief applies, eligible buyers may be able to recover up to that amount.

What’s Been Announced, And What’s Still Coming

On March 25, 2026, Premier Ford’s government announced a proposal to temporarily rebate the full 8% provincial portion of the HST on qualifying new homes valued up to $1 million, and said Ontario is working with the federal government toward combined relief of up to $130,000. The measure was included in Ontario Budget 2026, with construction eligibility, federal coordination, and claim details being finalized through regulation and CRA guidance.

Here’s what we know so far:

Who qualifies: Ontario’s expanded provincial rebate is intended to apply to all eligible buyers of newly constructed homes – not just first-time buyers – and to certain long-term residential rental properties. The federal component, final claim process, and exact amount available will depend on the buyer, project structure, and final implementation rules.

The potential combined rebate tiers:

• Homes up to $1,000,000 → potential full 13% HST relief (up to $130,000), if all provincial and federal requirements are met

• Homes from $1,000,000 to $1,500,000 → potential flat $130,000 maximum relief

• Homes from $1,500,000 to $1,850,000 → potential relief declines proportionally down to $24,000

• Homes over $1,850,000 → existing $24,000 provincial rebate may continue to apply where eligibility requirements are met

The signing window: For homes purchased from a builder, your Agreement of Purchase and Sale must generally be dated between April 1, 2026 and March 31, 2027. This is a one-year window — not your closing date, occupancy date, or construction start.

Construction timelines: For homes purchased from a builder, construction must generally begin on or before December 31, 2028, and reach substantial completion by December 31, 2031. For owner-built homes — where you build or hire someone to build on land you own or lease — Ontario’s current guidance points to a shorter construction-start window, generally April 1, 2026 to March 31, 2027, with substantial completion by December 31, 2029.

Custom builds: A Normerica timber frame home may fit within the intended scope of the new-home relief, but the details matter. How the rebate applies to your specific project will depend on whether your arrangement is treated as a builder sale, an owner-built home, or another structure, so we’d encourage you to speak with both your Normerica project specialist and a qualified tax advisor early in the process. One detail worth flagging now if you already own your lot: eligibility generally hinges on the value of the completed home including the land, not on construction cost alone.

What’s Still Being Finalized

This is important, and we want to be straight with you about it: as of June 2026, neither the provincial nor the federal enhanced relief is yet formally available to buyers. Ontario’s Bill 114 received Royal Assent on May 12, but the CRA has confirmed that this step only enables Ontario to issue the regulations still needed to make the rebate operational – it does not make the rebate available at closing. The federal first-time home buyer GST rebate (Bill C-4, March 2026) is in force, but the broader $130,000 opportunity for all eligible Ontario buyers, first-time or otherwise, is still subject to final provincial and federal regulations and CRA administrative guidance.

What that means practically:

• The Ontario program structure and intent are clear and well-documented, but the rebate is not yet formally payable or creditable at closing

• The key Ontario eligibility window is April 1, 2026 – March 31, 2027, but the relevant trigger depends on the project structure

• Buyers closing now may need to pay the full HST at closing and apply directly to CRA once regulations are in force (CRA has noted direct payments can take up to six months to process)

• A tax professional should be consulted before making binding financial decisions based on the rebate

For the most current and authoritative information, monitor these official sources:

• Ontario 2026 Budget — HST Measures

• Canada Revenue Agency — RC4028 GST/HST New Housing Rebate

• Toronto Regional Real Estate Board — 2026 HST Rebate Summary (PDF)

You can also read strong breakdowns of what’s known from legal and real estate perspectives at Gowling WLG, and Segal GCSE LLP.

What This Means for a Custom Timber Frame Build

For most Normerica clients, a custom timber frame home is the most significant investment they’ll ever make. This is not an entry-level purchase; it’s a considered, deeply personal project, often priced well above starter-home construction.

That’s exactly why this program matters. Many custom builds fall in the $1M–$1.5M range where the potential maximum $130,000 relief may still be available. Because custom homes can be structured differently, from a builder-led new-home purchase to an owner-built arrangement on land you already own, the path to eligibility should be reviewed early, before contracts and construction timing are locked in.

If you already own your land, this is worth running the numbers on early. On the owner-built path, the rebate amount you actually claim is generally based on the HST you’ve paid on construction itself, since no HST changes hands on land you already hold. But which band your project falls into is generally based on the fair market value of the completed home, land included. A higher-value lot can push a project into a different band than the construction budget alone would suggest, so it’s worth confirming early with a tax advisor rather than assuming build cost is the only number that matters.

A potential $130,000 rebate on a custom build doesn’t change what you’re building – but it can meaningfully change what you keep. It’s the difference between that amount going to tax and going toward your finishes, your land, or your future.

What We’re Doing About It

“This is a significant development for anyone who has been on the fence about building now versus waiting. A potential $130,000 saving is real money, and we want every Normerica client to understand what they may be entitled to. We’re monitoring the legislation and CRA guidance closely and working with our advisors to ensure that as the rules are finalized, our clients have the information they need to qualify. If you’re thinking about building in the near future, this is the conversation to start now.”

— Chris McFarlane, President, Normerica

At Normerica, we’re following the legislative progress on this program as details are confirmed through regulation and CRA guidance. Our team is working with legal and tax advisors to stay current on claim procedures, timing requirements, and what our clients need to do – and when – to take advantage of any relief available to them.

We can’t guarantee outcomes on a program that is still being fully implemented. What we can do is make sure our clients aren’t navigating it alone.

The Window Is One Year. Start the Conversation Now.

If building your timber frame home has been in the plans, the April 1, 2026 – March 31, 2027 window is worth taking seriously. Whether you’re early in the design phase or ready to move forward, the time to understand your rebate eligibility is before you sign or start construction — not after.

Talk to our team →

Note: This blog is for general information purposes only and does not constitute tax or legal advice. Rebate eligibility, amounts, timing requirements, and claim procedures are subject to final legislation, regulations, and CRA guidance. Consult a qualified tax professional before making decisions based on this program.

Sources: Ontario Budget 2026 (budget.ontario.ca); Gowling WLG; Segal GCSE LLP; Toronto Regional Real Estate Board; Canada Revenue Agency

Your HST Relief Questions, Answered

Q: What is the 2026 Ontario HST rebate for new homes?
A: Ontario announced a proposal in its 2026 Budget to temporarily rebate up to the full 13% HST — provincial and federal combined — on newly constructed homes. Eligible buyers could recover up to $130,000, depending on the value of their home, their buyer status, and how the rebate is structured for their specific project.

Q: Who qualifies for the rebate?
A: Ontario's expanded provincial rebate is intended to apply to all eligible buyers of newly constructed homes — not just first-time buyers — as well as certain long-term residential rental properties. The federal component is currently available to first-time home buyers only. Eligibility depends on your project structure, home value, buyer status, and timing, so speaking with a tax advisor early is important.

Q: What is the eligibility window?
A: For homes purchased from a builder, your Agreement of Purchase and Sale generally needs to be dated between April 1, 2026 and March 31, 2027. For owner-built homes, the construction-start window follows the same general timeframe. This is a one-year window — not your closing or move-in date.

Q: How much could I get back?
A: It depends on your situation. Ontario's provincial rebate alone can provide up to $80,000 in relief — that's the full 8% provincial portion of HST on homes valued up to $1 million, with a maximum of $80,000 for homes between $1 million and $1.5 million. If you're also a first-time home buyer, the federal First-Time Home Buyers' GST Rebate can add up to $50,000 on top of that, for a combined maximum of $130,000. If you're not a first-time buyer, the federal component works differently and the combined savings will be lower. This is one of the most important reasons to speak with a tax advisor early — the total available to you depends on your specific situation.

Q: Does the rebate apply to a custom timber frame build?
A: Potentially yes — a Normerica timber frame home is a newly constructed home, which is what this program is designed for. However, how the rebate applies to your specific project depends on your contract structure, land ownership, and how the CRA classifies your build. We encourage you to speak with your Normerica project specialist and a qualified tax advisor early in the process.

Q: Is the rebate available right now?
A: Not yet at closing. As of June 2026, Ontario's Bill 114 has received Royal Assent, but the CRA has confirmed that regulations are still needed to make the rebate operational. Buyers closing now may need to pay full HST at closing and apply directly to the CRA once regulations are in force — a process the CRA notes can take up to six months.

Q: I already own my lot. Does that affect my eligibility?
A: Yes, and it's worth understanding early. On the owner-built path, the rebate is generally calculated based on HST paid on construction — since no HST applies to land you already own. However, which rebate band your project falls into is typically based on the fair market value of the completed home including the land, not construction cost alone. A higher-value lot can affect which tier applies, so confirm this with a tax advisor before assuming your build cost is the only number that matters.

Q: What should I do right now?
A: Start the conversation — with Normerica and with a tax professional. The one-year eligibility window is active, and the time to understand your options is before contracts are signed and construction timelines are set, not after.