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Ontario Announces GST/HST Rebate
For New Homes and First-Time Home Buyers only
By Davinder Bawa | Realtor® | 7 Min Read | Updated: October 2025
What Is the 2025 First-Time Home Buyer Rebate?
In 2025, both the Government of Canada and the Province of Ontario announced a major tax relief plan for first-time home buyers.
Together, these proposals aim to remove the entire 13% HST (Harmonized Sales Tax) on newly built or substantially renovated homes purchased by first-time buyers — up to a maximum purchase price of $1,000,000.
That means eligible buyers could receive a full 13% rebate — which equals up to $130,000 in savings on a $1 million home.
Quick Summary
Federal Rebate (5%)
On May 27, 2025, the Federal Department of Finance announced a First-Time Home Buyer GST Rebate, allowing qualified first-time buyers to recover up to 5% of the home’s price — up to a maximum of $50,000.
This applies to:
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New or substantially renovated homes
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Certain co-operative housing units
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Owner-built homes (if construction begins within the eligibility window)
For homes priced between $1,000,000 and $1,500,000, the rebate amount gradually decreases based on a sliding scale.
Ontario Rebate (8%)
On October 28, 2025, the Province of Ontario announced it would match the federal initiative by offering a provincial rebate of the 8% Ontario portion of the HST.
This means first-time buyers could receive:
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A full 8% rebate on homes up to $1,000,000
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A gradually reduced rebate for homes between $1,000,000 and $1,500,000
When combined with the federal rebate, the total potential savings equal the entire 13% HST — making it one of the most generous housing tax relief programs to date.
💰 Example Savings Breakdown
👥 Who Qualifies for the 2025 Rebate?
To qualify as a first-time home buyer, you must:
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Not have owned a home (or interest in a home) that you occupied as your principal residence in the past.
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Be purchasing a newly constructed or substantially renovated home.
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Meet the timing conditions — typically for purchase agreements entered on or after May 27, 2025 (for federal rebate) and once the Ontario rebate is implemented.
This program does not apply to resale homes — only new construction or substantial renovations.
⚠️ Important Notes
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Still a proposal: Both federal and provincial measures are policy proposals, not yet law.
They will take effect once legislation receives Royal Assent and details are published by the Canada Revenue Agency (CRA) and the Ontario Ministry of Finance. -
Interaction with existing rebates: Ontario already has an HST New Housing Rebate (up to $24,000). The new 13% rebate is designed to complement or replace that for qualifying first-time buyers.
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Builder pricing: Builders may eventually advertise prices “HST included,” but until the rebate is fully approved, always confirm whether prices reflect the new savings.
Real Example: $950,000 Home in Milton
Let’s take an example of a new townhouse in Milton priced at $950,000.
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Federal 5% rebate = $47,500
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Ontario 8% rebate = $76,000
✅ Total potential savings = $123,500
That’s $123,500 less in tax — making the dream of homeownership far more achievable for first-time buyers.
Timeline Summary
Why This Matters
For years, home buyers in Ontario have paid 13% HST on new builds — a massive cost barrier for first-time homeowners.
This 2025 proposal is a game-changer.
If fully implemented, it could save eligible buyers tens of thousands of dollars, reduce upfront costs, and make new construction homes more attainable across the province.
💬 Want to Know Your Exact Savings?
If you’re thinking about buying your first home in 2025 or planning a new build purchase, I can help you calculate your exact rebate amount and numbers breakdown. Click below to book free 1:1 session with me: