Buying your first home in Ontario has always been a challenge – and lately, it’s felt more like climbing a mountain. Between rising home prices, interest rates, and the long list of upfront costs, first-time buyers often feel like they’re running a marathon uphill.
This fall, the Ontario government announced a first-time home buyer rebate that could take some of that weight off your shoulders. It’s a targeted HST rebate for first-time home buyers of new homes, and for many Ontarians, it could mean tens of thousands of dollars in savings.
If you’ve been on the fence about buying a new-build, this might be the break you’ve been waiting for. Let’s unpack what the rebate means, how it works, and how to tell whether it could help you reach your homeownership goal.
What Exactly Is This New Rebate?
In its 2025 Fall Economic Statement, the Ontario government introduced a first-time home buyer rebate that refunds the provincial portion of the HST (8%) on qualifying new homes.
In plain terms, that means if you buy a qualifying new-build home, you could get back the entire provincial share of the tax – a significant amount considering that Ontario’s combined HST is 13% (5% federal + 8% provincial).
Here’s how the first-time home buyer rebate works: buyers of new homes priced up to $1 million will receive a full provincial rebate. Homes priced between $1 million and $1.5 million will see a gradual phase-out, while any home priced $1.5 million or higher won’t qualify at all.
This measure is part of Ontario’s broader “Lowering Costs for First-Time Home Buyers” plan, a set of affordability efforts aimed at easing barriers to entry for new buyers. While the details – like the official start date and rebate formula – will be finalized once the legislation is passed, the overall direction is clear: the province wants to help first-time buyers save money on new homes.
Why It Matters for First-Time Buyers
If you’ve ever looked into buying a new home, you know how quickly taxes add up. Even when HST is “included” in the builder’s advertised price, it’s still baked into your final cost. For a home at $900,000, the 13% HST totals $117,000 – and that’s before land transfer tax, legal fees, and insurance.
This first-time home buyer rebate offers first-time buyers some breathing room. On a $1 million home, an 8% provincial HST refund could translate into about $80,000 to $100,000 in savings. That’s money you could redirect toward your down payment, closing costs, other hidden costs of buying a home or even furnishing your new place.
Beyond the savings, the rebate also sends an encouraging signal. By setting the eligibility ceiling at $1 million, the province is recognizing that affordability challenges exist far beyond Toronto. In cities like Ottawa, Kingston, Barrie, or London, many new homes fall below that price point – meaning more buyers can actually benefit from this first-time home buyer rebate.
Still, this isn’t a silver bullet. With borrowing costs still high, supply limited, and closing costs unchanged, the rebate won’t fix affordability overnight. But it does help narrow the gap, making ownership more attainable for many who’ve been saving and waiting for the right opportunity.
Who Qualifies – and What to Watch Out For
So, who can actually claim this new first-time home buyer rebate? At this stage, eligibility follows the standard definition of a first-time home buyer: someone who has not owned a home in Canada (or abroad) and intends to use the new home as their principal residence. The property itself must be newly built or substantially renovated, since HST only applies to new construction.
The rebate is price-based. You’ll qualify for a full rebate if your new home costs $1 million or less. The benefit then tapers off until $1.5 million, where it disappears altogether.
One important caveat: the rebate is proposed, not yet enacted. That means you’ll need to pay attention to the final rules when they’re released. In particular, details such as when the contract was signed, whether the home must be completed by a certain date, and how partial rebates are calculated could all influence eligibility.
If you’re already looking at new-build homes, make sure to discuss the first-time home buyer rebate with your realtor and builder so you’re clear on timing and qualification before signing anything.
What Could You Actually Save?
Let’s take a closer look at how the first-time home buyer rebate could impact your bottom line. These examples assume the rebate equals the full 8% provincial portion of the HST for homes under $1 million, with a gradual phase-out up to $1.5 million.
| Home Price | Total HST (13%) | Approx. Provincial HST Rebate (New Measure) | Net Cost After Rebate | Estimated Savings |
| $800,000 | $104,000 | $64,000 (full 8%) | $840,000 | $64,000 |
| $1,000,000 | $130,000 | $80,000 (full 8%) | $1,050,000 | $80,000 |
| $1,200,000 | $156,000 | ~$48,000 (partial rebate) | $1,308,000 | $48,000 |
| $1,400,000 | $182,000 | ~$24,000 (phased out) | $1,558,000 | $24,000 |
Note: These figures are simplified estimates for illustration only. Actual rebate amounts will depend on the finalized government formula.
As shown above, the first-time home buyer rebate delivers the biggest benefit on homes under $1 million. For homes between $1 million and $1.5 million, you still receive some partial savings – which can still be meaningful when combined with other programs like the federal GST/HST rebate or Ontario’s land transfer tax refund.
A Few Considerations Before You Buy
While the first-time home buyer rebate offers welcome relief, buyers should stay realistic about its impact. First, supply matters – and in many regions, there simply aren’t many new homes priced under $1 million. Builders may also adjust pricing to reflect higher demand from rebate-eligible buyers, which could offset some of the savings.
Second, remember that the rebate doesn’t reduce your down payment requirement. Lenders calculate your mortgage based on the full purchase price, not the price minus the rebate. You’ll still need to qualify for financing and prepare for all the other purchase costs – from inspections to legal fees and insurance.
Finally, because the measure is still proposed, you’ll want to confirm timing before making any big decisions. When the legislation passes, the Ontario government will specify whether the rebate applies to homes purchased after a certain date or to contracts signed after the announcement.
If you’re considering buying a new home soon, it’s a good idea to have your offer paperwork reviewed by a professional who understands these timelines and how they affect eligibility.
What’s Next for Ontario Home Buyers
For now, first-time buyers should use this period to plan ahead. Keep track of the first-time home buyer rebate updates on the Ontario government’s website, and start modeling how potential savings could affect your affordability.
If you’re working with a real estate agent (or thinking about it), ask for help comparing the costs of new homes versus resale homes. While the rebate applies only to new builds, sometimes a resale property may still make more financial sense once you factor in location, maintenance, and long-term appreciation.
You can also explore how this provincial rebate stacks with other existing incentives – such as the Home Buyers’ Plan, and the First Home Savings Account. Used together, these programs can significantly lower the upfront and long-term costs of buying your first home.
Lisa’s Tip
“This first-time home buyer rebate is a fantastic opportunity – but you still need to plan strategically. If you’re eyeing a new-build under $1 million, now’s the time to start running the numbers. Even a partial rebate could make a meaningful difference, especially when combined with your FHSA and land transfer tax savings.
Before you sign anything, start the conversation with a real estate expert who can walk you through how – and when – the rebate applies. Timing can make all the difference. Let’s connect to review your options and make sure you’re set up to take full advantage of this rebate when it launches.
