Ottawa new builds: $130K in HST relief, most of it not law

Three rebates got announced. One of them is law.

If you have walked into a new-build sales centre in Ottawa this year, someone has told you about the HST relief. They may have said the number $130,000. They were not lying, exactly, but the number is doing a lot of work it has not earned.

There are three separate programs in play, announced over about ten months, and they are at three completely different stages.

The federal first-time home buyers' GST rebate is real. Bill C-4 received Royal Assent on March 12, 2026, and the CRA started accepting applications on March 17. It rebates up to 100% of the 5% federal portion of the HST, to a maximum of $50,000, on a new home for a first-time buyer. That one you can bank.

Ontario's first-time home buyers' rebate for the 8% provincial portion, worth up to $80,000, was announced on October 28, 2025. As of the most recent legal commentary I have seen, from Gowling WLG in April, the amendments to implement it had not been tabled. Nine months after the announcement.

Then in the March 26, 2026 budget, Ontario proposed something broader: a temporary enhanced New Housing Rebate that removes the full provincial 8% on new homes up to $1 million for anyone using it as a primary residence, not just first-timers, plus provincial money covering the federal 5%. That is where $130,000 comes from. Ontario's own backgrounder, last updated May 5, says the provincial portion has to be implemented through regulations under the federal Excise Tax Act, and that details on the 5% side "will be made available at the earliest possible opportunity."

That is government for "we do not have a date."

What the enacted one is actually worth here

The $50,000 headline requires a home priced at $1 million. Ottawa's new-build product mostly is not.

Run it on a new condo or town with a $500,000 pre-tax price, which is a realistic Ottawa number.

HST on that is $65,000. Twenty-five thousand federal, forty thousand provincial.

The old federal new housing rebate gives you nothing. It pays 1.8% of the price up to $350,000 and phases out completely by $450,000. Those thresholds have not moved since the GST was introduced in 1991. The maximum that rebate has ever paid anyone is $6,300. On a $500,000 home it is zero.

Ontario's existing rebate pays 75% of the provincial portion on the first $400,000, capped at $24,000. You get the cap.

The new federal first-time buyer rebate sits on top of the old federal one and takes your federal recovery to 100%. So you get the full $25,000 back.

Add it up. You paid $65,000 in HST. You recover $49,000. You are still out $16,000, and that $16,000 is the un-rebated slice of Ontario's 8%, which is precisely the piece that is not law yet.

So the honest number for an Ottawa first-time buyer on a $500,000 new build is $25,000, not $50,000 and definitely not $130,000. It is real money. It is half of what the headline implies.

The pricing problem nobody warns you about

Here is the part that can actually cost you at the closing table.

Builders can price the enacted federal rebate into a purchase price, because it exists. They cannot safely price in relief that has not been legislated. Gowling's tax group flagged exactly this: if a builder sets a lower price on the assumption that the Ontario legislation passes, and it has not passed by your closing date, the price payable on closing has to go up. You would need to fund that gap yourself, at closing, and chase the rebate afterward.

That is not a hypothetical for anyone buying pre-construction in Barrhaven or Kanata right now with a 2028 occupancy.

So before you sign, get your lawyer to confirm in writing which specific rebates are being credited to you by the builder, and what happens to the price if the enabling legislation is not in force on your closing date. If the agreement is silent on that, it is not silent in your favour.

Do not try to re-sign your old agreement

Builders have been buried in requests from buyers who signed before April 1, 2026 and want to redo the paperwork to catch the new window. The federal first-time buyer legislation already prohibits varying, assigning or terminating an agreement solely to qualify. Ontario's version is expected to copy that. The CRA will look closely at any agreement that got conveniently re-papered.

Do not build a plan around it.

The date that decides whether you qualify

This one catches people, and it is worth $25,000.

For the federal first-time buyer rebate, you must be a first-time buyer on the date ownership transfers to you. Not the date you signed. The test is that neither you nor your spouse lived in a home you owned, anywhere in the world, in the current calendar year or the previous four.

The CRA's own example makes the point. Someone who sold their home in June 2022 and takes ownership of a new build in August 2026 does not qualify, because 2022 is inside the four-year window. The same person taking ownership in February 2027 does qualify.

A closing date can be worth twenty-five thousand dollars. If you are within a year of that line, work out where you land before you commit to an occupancy.

One more: neither you nor your spouse can have claimed this rebate before. It is once per couple, permanently.

What I would actually tell you

The rebate only applies to new construction. It does nothing for the resale bungalow in Orleans that might suit you better.

And look at what Ottawa is building. Of the roughly 15,600 units under construction in this city, more than 13,000 are apartments. Meanwhile the apartment benchmark was the weakest segment in the June OREB numbers, down 6.0% year over year while single-family benchmarks were nearly flat.

So the tax policy is pointing first-time buyers directly at the one segment of the Ottawa market that is falling. A $25,000 rebate does not cover a 6% move on a $500,000 unit. That is $30,000.

Take the rebate if you qualify. It is free money and you should claim every dollar. Just do not let it be the reason you buy. Buy the unit because the unit works.

The Ontario window, if it ever becomes law, needs an agreement signed between April 1, 2026 and March 31, 2027. Under eight months left on a program that has not been written yet.

If you are looking at a new build in Ottawa and want someone to read the agreement with you before you sign it, that is a conversation worth having early rather than at closing. Call me at 613-262-6545 or email fil@613realtor.ca.