New Home GST/HST Rebate: Why the Person Living There Must Be the Owner or a Tenant
New Housing Rebate vs the NRRP Rebate — the occupancy rule Ontario buyers keep missing
Why does the GST/HST rebate on a new home require that the owner or a tenant actually move in?
Because the rebate is tied to the home being used as a real home — either owner-occupied or long-term rented. The owner track (the GST/HST New Housing Rebate) requires that you or a relation move in as your primary place of residence. The landlord track (the New Residential Rental Property Rebate, or NRRP) requires a signed lease of at least one year with the tenant as the first occupant. Neither track allows a unit that sits empty, gets assigned before closing, or is never lived in — do that after claiming, and CRA recovers the rebate plus interest. According to CRA, both tracks cap the Ontario portion at 24,000 dollars and the federal portion at roughly 6,300 dollars.
Source: CRA — GST/HST New Housing Rebate & NRRP Rebate (2025)
Almost every Ontario new-home buyer runs into the GST/HST rebate — often it is already baked into your purchase price, credited by the builder before you ever see a bill. But at the closing table I keep meeting the same misunderstanding: buyers treat the rebate as an automatic discount that comes with any new build. It is not. It is a conditional rebate, and the condition comes down to one idea — someone has to actually live in the home. Either you or a relation as an owner-occupier, or a long-term tenant. Get that step wrong and, a couple of years later, CRA can send a bill to claw the money back with interest.
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Two rebate tracks, decided by who moves in
The 13% HST on an Ontario new home splits into a 5% federal part and an 8% provincial part. To keep the tax from crushing owner-occupiers and people who supply long-term rentals, the government built two rebate tracks. According to CRA:
Owner track — the GST/HST New Housing Rebate: you buy a new or substantially renovated home from a builder and you or a relation use it as your primary place of residence. A relation includes a spouse or common-law partner, child, parent, or sibling.
Landlord track — the New Residential Rental Property Rebate (NRRP): you buy the new home to rent out, and the first person to occupy it is a tenant on a lease of at least one year.
💡 Same home, same rebate dollars — which track you use turns on one fact: is the first real occupant your own household, or a long-term tenant? Nobody living there means neither track holds.
How much you get: provincial and federal, calculated separately
Most people remember only the headline maximum and stop there. According to CRA, break it into two parts:
Provincial part (Ontario 8%): 75% of the provincial tax paid, capped at 24,000 dollars. Once the home’s fair market value passes 400,000 dollars you generally hit that 24,000 cap — and this part is available regardless of how high the price is.
Federal part (5% GST): 36% of the federal tax, capped at roughly 6,300 dollars, but only up to a 350,000 price; it phases down between 350,000 and 450,000 and drops to zero above 450,000. Most GTA new builds sit well over 450,000, so in practice the money you keep is usually just that provincial 24,000.
The owner-occupied money: the builder credits it at closing
This is the step that fuels the automatic-discount myth. If you intend to occupy at the time you sign and you assign the rebate to the builder, the builder credits the rebate straight off the price you owe at closing, then settles with CRA directly. What you see on paper is a net price that already includes the rebate — you simply never paid the extra.
In my deals I put it to clients plainly: because the builder fronted this money for you, if CRA later decides you did not meet the occupancy test, it comes after you, not the builder.
Pre-construction assignments: the rules change
If you did not buy directly from the builder but stepped into someone else’s pre-construction contract (an assignment), the builder generally will not credit the rebate at closing. In that case you must apply to CRA yourself after closing and prove you meet the owner-occupied or rental test. Do not assume the rebate is there — confirm the contract structure first.
The rental money: you file the NRRP with CRA yourself
An investment property runs on the NRRP. The builder does not credit it, so you pay the full HST at closing and then apply to CRA for the rebate yourself. The anchor document is a signed lease of at least one year proving the first occupant is a long-term tenant. According to CRA, you must file within two years after the end of the month in which the tax first became payable.
⚠️The classic pre-construction investor mistake: assuming you can claim owner-occupied for the rebate, take the keys, then switch to renting and keep the money. In reality, once the first occupant is a tenant and you never moved in, the owner rebate collapses — and the NRRP you should have claimed is often lost because it was filed wrong or missed the two-year window. Lock the direction in from the start.
The costliest trap: claim owner-occupied, then flip or never move in
This is the most expensive mistake I see. Here is how it unfolds:
You take the rebate as owner-occupied at closing
You sign the occupancy declaration and the builder credits you the 24,000 (or more). On the surface everyone is happy.
But you never move in, or you flip / rent it quickly
You take the keys and never occupy — you list it for rent, or you assign the pre-construction unit and cash out within months. CRA can find that your stated intent to occupy at signing does not hold. In the 2025 Tax Court of Canada case Ram v. The King, the buyers sold the house three months after closing and neither they nor any relative had ever lived there; the court held they did not qualify for the new housing rebate.
CRA claws the rebate back, with interest
You have to repay the rebate you were credited, plus interest. Worse: if you should have used the NRRP (rental) track but claimed owner-occupied instead and missed the two-year window to file the NRRP correctly, you can end up with neither — the owner rebate clawed back and the rental rebate expired.
The fix: pick the right use from day one
If you are renting it out, run the NRRP properly: pay the HST at closing, then file with CRA once you hold a signed one-year lease. If you are living in it, actually move in and keep the evidence (utility bills, driver’s licence address, and tax address all pointing to the home). The use should be locked in the moment you sign, not decided after you have taken the rebate. Switching from owner-occupied to rental partway through can be treated as a change-of-use deemed sale under the Excise Tax Act, which drags its own tax bill back in.
💡 The rebate is not a default perk of buying new — it is the price of how you actually use the home. Pick the wrong status and, years later, you repay it with interest, often more than you saved.
Frequently Asked Questions
I am buying a new home to live in myself — will the rebate come automatically?
Not automatically, but if you declare owner-occupancy at signing and assign the rebate to the builder, the builder usually credits it straight off the price at closing, so you see a net price that already includes it. The catch is that you or a relation must genuinely use it as your primary residence — CRA can verify this after the fact.
Can I claim both the owner rebate and the rental (NRRP) rebate?
No. The first use of a given home has one status: owner-occupied or long-term rental. You pick one track based on actual use. The idea of claiming owner-occupied first and then switching to rental to grab a second rebate does not work and instead triggers a clawback.
Is the one-year lease for the rental rebate really mandatory?
Yes. According to CRA, the NRRP requires the first occupant to be a tenant on a lease of at least one year, and that lease is the core proof of eligibility. Short-term rentals, a vacant unit, or your own occupancy do not qualify for the NRRP.
What happens if I claimed owner-occupied and then assigned the pre-construction unit?
If neither you nor a relation ever moved in before you assigned or sold, CRA can find the intent to occupy did not hold and recover the rebate you were credited, plus interest. In the 2025 Ram v. The King case, buyers who sold three months after closing with no one occupying were held ineligible.
What is the most I can get back?
According to CRA, the Ontario provincial part refunds 75% of the provincial tax paid up to 24,000 dollars, effectively maxed once the price passes 400,000; the federal part refunds 36% up to roughly 6,300 dollars, but only up to a 350,000 price and zero above 450,000. On most GTA new builds you keep only the provincial 24,000.
Arthur Zhao
Real Estate Broker · FRI · ABR · SRS · PSA · MCNE · E-PRO · CLHMS & GUILD Elite · REAIS
VP & Branch Manager, Bay Street Group Inc.
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