HST on Pre-Construction Condos in Ontario (2026 Guide)

Every new pre-construction condominium unit in Ontario is a taxable supply under the federal Excise Tax Act, so 13% HST applies to the purchase. What differs between buyers is who pays the HST and how the rebate is claimed. An owner-occupier who intends to move in usually pays HST inside the sticker price because they assign the GST/HST New Housing Rebate (federal and Ontario portions) to the builder on signing. An investor who intends to rent the unit cannot assign the rebate to the builder and instead pays the full HST at closing, then applies for the New Residential Rental Property Rebate through CRA Form GST524. Assignments of new-housing contracts have been HST-taxable since May 7, 2022 per amendments to the Excise Tax Act.

Key takeaways

HST at 13% applies to every new Ontario condominium sale (5% federal GST + 8% Ontario provincial component).
The GST/HST New Housing Rebate has two parts: the federal portion (phasing out above $350,000 FMV, fully unavailable above $450,000) and the Ontario portion (available up to a maximum rebate of $24,000).
Owner-occupiers who occupy the unit as their primary place of residence or the primary place of residence of an immediate relation typically assign both rebates to the builder, and the sticker price already reflects the net cost.
Investors who buy to rent pay the full HST at closing and then claim the New Residential Rental Property Rebate on CRA Form GST524 within two years.
Since May 7, 2022, all assignments of new-housing purchase contracts are taxable at 13% HST on the assignment fee (with a limited exception for the recovery of the original deposit paid to the builder).

Why HST applies to pre-construction condos
The New Housing Rebate explained
Owner-occupier path
Investor path and the NRRP Rebate
HST on assignments after May 7, 2022
What happens if intent changes after signing
Worked example: $850,000 suite
Common risks and misunderstandings
HST checklist
Frequently asked questions

Why HST applies to pre-construction condos

Under the federal Excise Tax Act, the sale of a new residential complex is a taxable supply. In Ontario, the applicable rate is HST at 13% (5% federal GST + 8% Ontario component). This tax applies to the full purchase price of a new pre-construction condo unit.

The Excise Tax Act also provides two rebates to reduce the tax where the property will be lived in as a primary residence, or rented to a person who will use it as their primary residence:

GST/HST New Housing Rebate (federal and Ontario portions).
New Residential Rental Property (NRRP) Rebate for landlords.

Both rebates are administered by the Canada Revenue Agency.

The New Housing Rebate explained

The federal portion of the GST/HST New Housing Rebate:

Applies to the 5% federal component of the HST.
Available on qualifying homes with a fair market value of up to $450,000.
Phases out linearly between $350,000 and $450,000 in fair market value.
Above $450,000, the federal portion is not available.

The Ontario portion of the New Housing Rebate:

Applies to the 8% provincial component of the HST.
Provides a rebate equal to 75% of the provincial portion, capped at $24,000.
The cap applies to homes with a fair market value of $400,000 or more (at $400,000 the 75% rebate reaches $24,000, and the same $24,000 applies at any higher price).
No phase-out based on fair market value.

Combining both portions:

On a $450,000 or below home, the buyer can obtain both federal and Ontario rebates.
On a $451,000 or higher home, the federal portion is zero, but the Ontario portion is still available up to $24,000.
Most Toronto pre-construction condos are priced above $450,000, so the practical rebate for owner-occupiers is the Ontario $24,000 maximum.

Note on the federal First-Time Home Buyer GST Rebate: as of 2026, the federal government has proposed a separate FTHB GST rebate for new homes up to specified value thresholds. Buyers should verify the current status and terms of that program with a qualified accountant and against CRA's current publications, as it interacts with the existing New Housing Rebate and has been subject to legislative change.

Owner-occupier path

To qualify for the New Housing Rebate, the buyer or an immediate family member ("qualifying relation") must intend to occupy the unit as their primary place of residence when they take possession.

Because the builder wants the sticker price to be closer to a resale-comparable number, most Ontario pre-construction APSs state that the buyer:

Represents and warrants that they will occupy the unit as their primary place of residence.
Assigns the New Housing Rebate to the builder on signing.

The builder credits the assumed rebate against the purchase price. If it later turns out the buyer did not occupy the unit as intended (for example, they closed and rented it out immediately), the builder can claw back the credited rebate on the statement of adjustments or after closing.

Owner-occupier buyers should:

Understand that the sticker price already reflects the assumed rebate.
Follow through on occupancy or be prepared to repay the rebate at closing.
Keep documentation of their move-in date, utility bills, driver's license update, and tax address.

Investor path and the NRRP Rebate

If the buyer intends to rent the unit to a tenant on the closing date, the builder cannot assume the New Housing Rebate. On closing:

The buyer pays the full HST (13% on the purchase price, subject to the specific HST-inclusive or HST-exclusive drafting in the APS).
Cash requirement can be $25,000 to $60,000 or more on top of every other closing cost.

After closing, the buyer can apply for the New Residential Rental Property Rebate:

Federal portion under section 256.2 of the Excise Tax Act.
Ontario portion under the Ontario NRRP schedule.
Application is made on CRA Form GST524 (and GST525 for schedules) within two years of the earlier of the tax becoming payable and the first supply of the rental property being made.
Requires a signed one-year lease with a qualifying tenant who will use the unit as their primary place of residence.

Once approved, CRA refunds the rebate to the buyer in the months after filing. The total rebate quantum is similar to the New Housing Rebate maximums, but the timing is very different: the buyer funds the full HST at closing and waits for CRA to process the refund.

For investors, planning the cash-flow bridge is essential. The typical exposures:

Full HST paid at closing.
Rebate application prepared with the help of an accountant or specialist tax firm.
Refund received 2 to 12 months after filing, sometimes longer.
CRA occasionally audits the file and requests supporting documentation.

HST on assignments after May 7, 2022

Before May 7, 2022, whether an assignment of a new-housing purchase contract was subject to HST depended on whether the original purchaser had bought with primary-residence intent. After that date, subsection 192.1(1) of the Excise Tax Act was amended so that all assignments of taxable new-housing agreements are treated as taxable supplies. The tax applies to the consideration paid on the assignment (the assignment fee), with a limited relief for the portion of that consideration that represents the recovery of the original deposit paid to the builder.

Practical implications for Toronto assignment sales:

The assignor collects 13% HST on the assignment fee (or on the assignment fee less the deposit recovery amount, as permitted).
The assignor remits that HST to CRA.
The assignee's cash outlay increases because they pay both the assignment fee and the HST on it.
Old assignment agreements written before the amendment must be reviewed against the current rule.

For the full process, see the Ontario condo assignment sale guide.

What happens if intent changes after signing

Life changes. A buyer who signed intending to occupy may end up needing to rent. A buyer who signed intending to rent may decide to occupy. The rebate implications:

Signed as owner-occupier, closed and immediately rented. The builder can claw back the credited New Housing Rebate. The buyer may then be able to claim the NRRP Rebate if the unit is genuinely rented to a qualifying tenant for their primary residence.
Signed as owner-occupier, closed and occupied for less than a year, then rented. The rebate is still generally recoverable if the buyer or qualifying relation was in fact the first person to occupy the unit and the intent at closing was genuine. Documentation matters.
Signed as investor, closed, and then moved in personally. The NRRP Rebate is not available because the unit is not rented, and the New Housing Rebate cannot be reclaimed from the builder because it was not assigned on signing.

The important word in every rebate rule is "intent at the time of closing." Buyers changing intent should speak with a tax professional before closing.

Worked example: $850,000 suite

Assumptions (illustrative only):

Purchase price: $850,000, stated in the APS as inclusive of HST net of assumed New Housing Rebate.
Ontario portion of HST rebate assumed: $24,000 (maximum).
Federal portion of HST rebate assumed: $0 (price is above $450,000).
Rates confirmed against CRA GST/HST New Housing Rebate publications as of July 2026.

Owner-occupier path

Cash HST outlay at closing: $0. The rebate is assigned to the builder and the $850,000 sticker price is the number the buyer owes for the unit.
Rebate quantum internalized by the builder: $24,000.

Investor path (buyer will rent to a qualifying tenant on closing)

The APS wording determines what "price" means. Many APSs specify a "price to the purchaser" that is inclusive of HST net of the assumed rebate. If the buyer cannot assign the rebate, the builder generally requires the buyer to make up the $24,000 at closing.
Additional HST outlay at closing (illustrative): approximately $24,000 to be recovered later via CRA Form GST524.
Refund received: 2 to 12 months after filing, depending on CRA processing.

Assignment path (sample assignment)

Assignor sells the contract to an assignee for a $50,000 assignment fee (in addition to reimbursement of the deposits paid to date).
HST on the assignment fee at 13%: $6,500.
The assignee pays $50,000 + $6,500 + deposit reimbursement. The assignor remits the $6,500 HST to CRA.

Every one of these numbers depends on the specific APS wording, the specific rebate quantum, and the specific tax status of the parties. This example is illustrative, not a quote.

[TAL'S PRACTICAL NOTE: Add a two-to-four-sentence observation about an investor buyer surprised by the HST cash requirement at closing, and how you would advise buyers to plan the NRRP rebate timeline today.]

Common risks and misunderstandings

"HST is not part of a pre-construction condo purchase." It is. Owner-occupiers just do not see it because it is netted inside the sticker price.
"If I close and rent it out, nothing changes." The builder can claw back the assumed New Housing Rebate. The buyer may then claim the NRRP Rebate separately.
"I can avoid HST by assigning the deal." Assignments themselves have been HST-taxable since May 7, 2022.
"The NRRP Rebate comes back quickly." It usually takes 2 to 12 months after filing, and CRA audit is not uncommon on higher-value files.
"The federal rebate applies to my $700,000 unit." The federal portion is fully unavailable above $450,000 in fair market value. Only the Ontario portion (max $24,000) is available.
"My lawyer will take care of the HST." The lawyer handles the closing mechanics. The HST plan should be discussed with an accountant well before closing.
"HST on the assignment fee is optional if the assignee reimburses me." The tax obligation attaches to the taxable supply. HST on an assignment is a legal obligation, not a matter of negotiation between the parties.

HST checklist

[ ] Reviewed the HST language in the APS with a lawyer during the cooling-off period.
[ ] Confirmed the assumed New Housing Rebate quantum and the buyer's assignment of it to the builder.
[ ] For an investor: modelled the full HST cash requirement at closing and the NRRP Rebate cash-flow bridge.
[ ] Retained an accountant familiar with new-housing HST who can prepare Form GST524 if applicable.
[ ] Kept a documentation folder for occupancy: driver's license update, utility bills, tax address, move-in date.
[ ] For assignments: confirmed HST treatment on the assignment fee and the deposit-recovery portion.
[ ] Verified whether the federal First-Time Home Buyer GST Rebate applies to the specific purchase.

Frequently asked questions

How much HST is on a $850,000 pre-construction condo in Ontario?

At 13% HST, the gross HST is $110,500. For an owner-occupier the sticker price is already stated net of the assumed New Housing Rebate. For an investor the $24,000 Ontario portion of the rebate can be recovered later through the NRRP Rebate.

Who pays the HST on a pre-construction condo?

The buyer, always. Owner-occupiers pay it inside the sticker price and never write a separate cheque. Investors pay it at closing and then recover the rebate from CRA later.

Can I claim the New Housing Rebate if I move in for a few months then rent?

Generally yes if you or a qualifying relation genuinely occupied the unit as your primary place of residence first and the intent at closing was genuine. Documentation is essential. Confirm with an accountant.

How long does the NRRP Rebate take?

CRA typically processes NRRP Rebate applications in 2 to 12 months after filing, sometimes longer with an audit request.

Is HST charged on an assignment sale in Ontario?

Yes. Since May 7, 2022 all assignments of new-housing purchase contracts are HST-taxable at 13% on the assignment fee, with a limited exception for the recovery of the original deposit.

What is Form GST524?

The CRA form for the New Residential Rental Property Rebate.

Do I get the full $30,000 of federal + Ontario rebate on a $500,000 unit?

The federal portion is not available above $450,000. The Ontario portion is $24,000. So on a $500,000 unit the practical rebate for an owner-occupier is $24,000.

Can I assign the New Housing Rebate to the builder if I plan to rent?

No. The rebate is only available where the buyer or a qualifying relation intends to occupy the unit as their primary residence. Investors take the NRRP Rebate path instead.

Conclusion

HST is one of the most misunderstood parts of a Toronto pre-construction condo purchase. The rules themselves are stable: 13% applies to the sale, the New Housing Rebate covers owner-occupiers who assign it to the builder, the NRRP Rebate covers investors who rent to a qualifying tenant, and assignments are HST-taxable on the fee. What trips people up is intent. Every buyer should confirm their intent with a lawyer and an accountant before signing and again before closing.

Call to action

Weighing the HST math on a specific Toronto pre-construction project? Browse current CondoWizard listings, or contact the team to be introduced to an accountant who prepares NRRP Rebate applications for Toronto investors.

Sources and last reviewed

Canada Revenue Agency. GST/HST New Housing Rebate (RC4028). https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4028.html
Canada Revenue Agency. GST/HST New Residential Rental Property Rebate (RC4231). https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4231.html
Canada Revenue Agency. Form GST524. https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/gst524.html
Government of Canada. Excise Tax Act, section 192.1 (assignments). https://laws-lois.justice.gc.ca/eng/acts/e-15/
Government of Canada. Excise Tax Act, section 256.2 (NRRP). https://laws-lois.justice.gc.ca/eng/acts/e-15/
Government of Ontario. New Housing Rebate (Ontario portion). https://www.ontario.ca/document/harmonized-sales-tax-hst

Last reviewed: 2026-07-25. HST rates, rebate schedules, and the federal FTHB GST Rebate are subject to legislative change. Buyers should verify current information with a qualified accountant before signing.

HST on Pre-Construction Condos in Ontario