# How does HST/GST work on new construction at closing in Canada?

> New homes attract GST/HST (5% federal + provincial component). As of March 12, 2026, eligible first-time buyers can recover up to $50,000 of federal GST under the new First-Time Home Buyers' GST/HST Rebate (Bill C-4) on new builds up to $1M. Non-FTHBs continue to claim the legacy New Housing Rebate (~$6,300 max on homes under $450K). In Ontario, a separate temporary measure rebates up to $80,000 of the 8% provincial portion — stacking with the federal program for combined relief of up to ~$130,000 for FTHBs.

Category: Closing
Last verified: 2026-05-13
Source: https://ratellow.com/faqs/closing/hst-gst-on-new-construction-closing-canada

## Answer
**New construction homes in Canada attract GST/HST on the purchase price — this is a major closing cost that resale homes do NOT have. Two federal rebate programs now exist in parallel.**

## Tax Rate by Province

| Province | Tax Rate |
|---|---|
| Ontario (HST) | 13% (5% federal + 8% provincial) |
| British Columbia (GST only) | 5% |
| Alberta (GST only) | 5% |
| Quebec (QST + GST) | 14.975% combined |

## Federal Rebate Option A: New FTHB GST/HST Rebate (Bill C-4, March 12, 2026)

**For first-time buyers only.** This is the program that changes the math for most new-build FTHBs.

| Home Price | Federal Rebate |
|---|---|
| Up to $1,000,000 | **100% of the 5% federal GST — max $50,000** |
| $1,000,000 – $1,500,000 | Linear phase-out |
| Over $1,500,000 | No federal rebate |

Eligibility: 18+, citizen or PR, no home ownership in current year + 4 preceding calendar years (spouse/CLP counts), primary residence + first occupant. APS must be signed between March 20, 2025 and December 31, 2030.

## Federal Rebate Option B: Legacy New Housing Rebate

**For non-FTHBs and as a fallback.** Permanent program, much smaller dollars.

| Home Price | Federal Rebate |
|---|---|
| Under $350,000 | 36% of GST — max ~$6,300 |
| $350K – $450K | Phases to $0 |
| Over $450,000 | No federal rebate |

## Ontario Stacking: Enhanced Provincial HST Rebate (Temporary)

For APS signed **April 1, 2026 → March 31, 2027**, Ontario rebates the **8% provincial HST portion** on new builds. Unlike the federal program's linear phase-out, Ontario uses a **flat $80K cap from $1M to $1.5M**, then phases down to a $24K legacy floor by $1.85M. Available to **ALL new-home buyers**, not just FTHBs.

| Home Price | Ontario Provincial Rebate |
|---|---|
| Up to $1,000,000 | 100% of 8% provincial HST (max $80,000 at $1M) |
| $1,000,000 – $1,500,000 | Flat $80,000 cap |
| $1,500,000 – $1,850,000 | Linear phase-down from $80,000 to $24,000 |
| $1,850,000+ | $24,000 (legacy Ontario NHR rate) |

**Combined Ontario maximum**: an FTHB on a $1M new build with APS in the Ontario window can recover up to ~**$130,000** total ($50K federal + $80K provincial).

## How the Rebate Is Handled

In most cases, **the builder factors the rebate into the purchase price** and claims it on your behalf at closing. For the new FTHB rebate, closings after March 12, 2026 are typically builder-credited; earlier qualifying closings (APS on/after March 20, 2025) require a retroactive CRA filing.

## Owner-Occupied Requirement

Both programs require the home to be your primary residence (or a qualifying family member's). Investment purchases do NOT qualify for either rebate.

### Your Next Steps
1. **Determine which federal rebate applies** — FTHB GST Rebate (if eligible) is dramatically more generous
2. **In Ontario**: check if your APS falls in the April 1, 2026 – March 31, 2027 window for provincial stacking
3. **Confirm with your builder** that the rebate is built into your price (and which one)
4. **Speak with your real estate lawyer** about the CRA filing process
5. **Read the full guide** → [First-Time Home Buyer Rebates Guide](/guides/first-time-buyer-rebates)

## Related guide
- https://ratellow.com/guides/closing-costs-canada

## Sources
- First-time home buyers' (FTHB) GST/HST rebate — CRA — https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html
- GST/HST on New Homes — CRA — https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-home-construction.html
- Ontario Enhanced HST Rebate for New Homes — https://budget.ontario.ca/2026/hst.html