How the HST Rebate Actually Works on New Builds

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If your client is buying a new construction home, one question matters more than most:

Are they planning to live in it — or rent it out?

Because the answer can change their closing costs by $24,000.

That's because Ontario offers an HST rebate on new construction homes — worth up to $24,000.

It applies to buyers whether they plan to live in the property or use it as an investment.

But how it’s applied depends on the buyer’s intended use.

Let me explain...

The advertised price on most new construction homes includes both HST and the HST rebate.

So when you see “$700,000 (HST included)”, that usually means:

$724,000 purchase price – $24,000 rebate = $700,000 due at closing

And that’s the first thing your clients need to understand:

They’re not getting an extra $24,000 off the price — it’s usually already baked in.

If the buyer plans to live in the property, the builder claims the rebate on their behalf and the buyer pays the net $700,000.

But if your client is buying as an investment, the builder can’t claim the rebate for them.

That means the buyer has to pay the full $724,000 up front — and apply for the $24,000 rebate themselves after closing.

Same property. Same rebate.

But a different process — and a higher cash requirement at closing.

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So what should Realtors do?

✔️ Don’t stop at “HST included” — ask if that includes the HST rebate

✔️ Confirm how your client plans to use the property

✔️ Explain that both end-users and investors qualify — but investors have to pay the rebate up front and recover it after closing

If your buyer is moving in, the price is what it says.

If they’re not, they’re bringing an extra $24,000 — and waiting to get it back.