HST on Real Estate in Ontario

Ontario's Harmonized Sales Tax (HST) is 13% (a 5% federal GST portion plus an 8% Ontario provincial portion). Whether HST applies to a real estate transaction depends chiefly on what is being sold and who is selling it.

Resale (used) residential housing — generally exempt

The sale of used residential property — a previously occupied house or condo sold by an ordinary homeowner — is generally exempt from GST/HST. Buyers of ordinary resale homes do not pay 13% HST on the purchase price. This is the most common residential transaction and the reason most home purchases in Ontario carry no HST.

Note that certain services connected to a resale purchase (legal fees, real estate commissions, home inspections, moving services) are still taxable at 13% even though the home itself is exempt.

New and substantially renovated housing — taxable

The sale of newly constructed or substantially renovated residential housing by a builder is taxable at 13% HST. This includes new pre-construction condos, new detached/semi/townhomes from a builder, and homes that have been "substantially renovated" (broadly, renovated to the extent that most of the interior is removed or replaced). "Substantial renovation" is a specific CRA test — verify at canada.ca.

For new-build purchases, contracts often quote a price that is HST-included with the rebate assigned to the builder, so buyers should confirm exactly how HST and any rebate are handled in their agreement.

GST/HST New Housing Rebate

To offset HST on a new or substantially renovated home that the buyer (or a relation) will use as a primary place of residence, CRA offers the GST/HST New Housing Rebate, which has two components. Verify all figures at canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/new-housing-rebate.html.

Federal component (the 5% GST portion)

• Provides a partial rebate of the federal 5% GST.
• The full federal rebate is available for homes with a fair market value up to $350,000.
• It phases out on a straight line between $350,000 and $450,000.
• There is no federal new housing rebate where the home's value is $450,000 or more. (Verify — these federal thresholds have been in place for many years and are periodically reviewed.)

Ontario component (the 8% provincial portion)

• Rebates 75% of the Ontario 8% provincial portion of the HST.
• Subject to a maximum of $24,000 (verify at CRA). The cap is reached at roughly $400,000 of home value.
• Unlike the federal portion, the Ontario rebate is available regardless of the home's price — homes over $450,000 still qualify for the Ontario portion up to the $24,000 maximum, even though they get no federal rebate.

Eligibility basics

Generally the buyer (or a specified relation) must intend the home to be their primary place of residence, the builder must have charged HST on the sale, and the claim must be filed within CRA's time limits. Investment/rental purchases do not use the New Housing Rebate — see below. Verify eligibility conditions at CRA.

Recent development to verify: Ontario and the federal government have announced temporary enhanced HST rebates for new homes (for example, relief up to $130,000 for eligible new-home agreements in a defined window around 2026–2027, and a federal first-time-buyer GST measure). These are time-limited and eligibility-specific — confirm current details and dates at canada.ca and the Ontario Ministry of Finance before relying on them.

New Residential Rental Property Rebate (NRRPR)

Buyers who purchase a new or substantially renovated home or condo as a rental investment cannot claim the New Housing Rebate (which requires personal occupancy). Instead they may claim the New Residential Rental Property Rebate (NRRPR), which provides comparable relief where the unit is leased to tenants for long-term residential use. It mirrors the New Housing Rebate structure — a federal portion tied to value and an Ontario provincial portion capped at a maximum (historically $24,000 before recent enhancements). The landlord typically pays the full HST at closing and then applies to CRA for the rebate. Verify current NRRPR rules, holding-period conditions, and maxima at canada.ca.

Commercial property

Sales of commercial real estate (offices, retail, industrial) are generally taxable at 13% HST. However, where both the buyer and seller are GST/HST registrants, the tax on many commercial sales is handled by the purchaser through self-assessment on their GST/HST return rather than being paid to the vendor at closing, subject to CRA's conditions. Verify at canada.ca.

Vacant / bare land

HST treatment of vacant or bare land depends on its character and use:

• Land sold by an individual that was kept for personal use is often exempt.
• Land that is part of a commercial activity, subdivided/severed in certain ways, or sold by a business/developer is generally taxable at 13%.
• Farmland and land severances have specific rules.

Because the outcome is fact-specific, confirm the treatment of any land sale with CRA guidance and a tax advisor.

Assignment sales of new housing — now generally taxable

An assignment sale occurs when a buyer under a pre-construction agreement sells (assigns) their contractual rights to another buyer before closing. Following changes to the Excise Tax Act (new section 192.1), CRA treats assignments of newly constructed or substantially renovated residential housing as taxable for GST/HST, including assignments made by individuals.

• Applies to assignment agreements entered into after May 6, 2022 (verify at CRA — see GST/HST Notice 323).
• The 13% HST applies to the assignment consideration (broadly, the assignor's profit/uplift plus amounts, with the portion attributable to the deposit generally excluded from the taxable consideration).
• Previously, taxability turned on whether the original buyer's true intent was personal use versus a commercial flip; the amendment removed that ambiguity for agreements after the effective date.

Assignors should confirm their GST/HST obligations, registration requirements, and reporting for any assignment. Verify at canada.ca (Notice 323 and publication GI-120).

All amounts and thresholds above are illustrative reference points that change over time. Confirm current rates, rebate maxima, phase-out thresholds, and eligibility at the Canada Revenue Agency before relying on them, and seek professional tax advice for a specific transaction.