Ontario HST Rebate Complete Guide: Owner-Occupied, Rental, Pre-Construction, and Renovation

1) The buyer or an immediate family member (spouse, parent, child, sibling) uses the home as their primary residence.
2) Primary residence status must be maintained for at least one year (CRA applies an “intention test”).
3) Held by an individual, not a corporation (corporate-held homes follow a different path entirely).

What counts as “primary residence”: the address on your driver’s license, tax filings, and OHIP card should all match. If you already own another primary residence, the new home is unlikely to pass.

Family-member rule: often missed — if you buy a home for your parents or for a child attending university, that qualifies. The NHR doesn’t require you personally to live there.

Federal GST portion (Federal NHR):
• Home < $350,000: 36% of GST paid, max $6,300
• $350,000–$450,000: sliding scale
• ≥ $450,000: federal portion drops to $0

Provincial PST portion (Ontario NHR):
• Regardless of price: 75% of provincial PST, capped at $24,000
• Once the home price exceeds ~$400,000, the Ontario portion locks at $24,000 maximum

Combined cap: $30,300

Worked example ($700,000 pre-construction unit):
• GST = $700,000 × 5% = $35,000; Federal NHR = $0 (over $450K threshold)
• PST = $700,000 × 8% = $56,000; Ontario NHR = $24,000
• Total rebate = $24,000
• Net HST paid = $35,000 + $56,000 − $24,000 = $67,000

1) You check “owner-occupied” on the Agreement of Purchase and Sale (APS).
2) Before closing, you sign an NHR assignment document, transferring rebate rights to the builder.
3) The builder credits the rebate directly on your final closing statement.
4) You pay “net price + net HST” — no out-of-pocket then reclaim.

Builders typically require a statutory declaration confirming primary-residence intent. That declaration goes to CRA. If you’re later audited and the declaration turns out to be untrue, CRA pursues you (not the builder).

Important: APS prices are usually “net” (rebate already deducted). If you check the wrong box, or change your mind to rent later, the builder will add the rebate back to your price — a $20,000–$30,000 surprise that many clients discover 60 days before closing.

1) Must sign a first long-term tenancy: at least 12 consecutive months with an individual tenant using the unit as their primary residence.
2) Buyer holds for at least 1 year (CRA treats this as a long-term investment, not a flip).
3) Single-unit holding; the buyer must be either a GST registrant or an individual investor.

“Primary residence” tenant test: the tenant’s driver’s license, tax address, and other personal records should match the rental address. Temporary stays, Airbnb, or corporate-travel housing don’t qualify.

Common disqualifiers:
• ❌ Airbnb / VRBO short-term rentals ≠ long-term tenancy
• ❌ “Symbolic” rent to family members is usually treated as owner-occupied by CRA (use NHR instead)
• ❌ Furnished short stays under 30 days don’t count
• ✅ Standard annual lease (12+ months) with a real third-party tenant is the cleanest path

On closing day: you pay full 13% HST (the builder adds the $24,000 it would have credited back to your bill).

After closing:
1) Sign a first long-term tenancy lease (≥ 12 months).
2) Gather documents: HST-paid invoice, the APS, the lease, the closing statement, ID.
3) Complete CRA Form GST524 — GST/HST New Residential Rental Property Rebate Application.
4) Complete Form RC7524-ON — Ontario Rebate Schedule.
5) Mail to the CRA Summerside Tax Centre or file via My Account online.
6) Deadline: 2 years from closing. Miss it and you forfeit the entire $30,300.

Refund timeline: 8–16 weeks normally; complex files can stretch to 6 months. CRA may request additional documentation.

Cash-flow impact: on a $700,000 pre-construction unit, the extra HST due at closing is around $20,000–$24,000. Plan for that liquidity well in advance.

Use NHR (owner-occupied path): buy a home for an immediate family member (spouse, parent, child, sibling) to live rent-free or with cost-recovery only (utilities). The family member uses the home as their primary residence.

Use NRRR (rental path): you rent to a family member at “market rent” or “near-market rent,” with a written lease.

Borderline checklist:
• Is rent actually transferred? (bank trail proves it)
• Is there a formal lease document?
• Is the amount close to market rates?

Parents living in it rent-free → NHR path; builder credits at closing.
Parents paying $1,500/month when market is $2,500 → grey area; CRA may reject both paths. Talk to your accountant first.
Sibling on a 1-year lease at full market rent ($2,500/month) → NRRR path; you apply after closing.

The practical timeline:
• APS signing: builders default to “owner-occupied” net pricing (rebate already deducted from the price).
• 60 days before closing: builder sends the statutory declaration — choose honestly here.
• Closing day: follow whichever path applies (NHR or NRRR).

Common scenario: intended owner-occupied at APS but converting to rental at closing. The builder must add back the $24,000 they originally deducted, increasing your HST bill. Many buyers don’t have that cash ready, causing late closings or defaults.