Do You Pay HST When You Buy a Home in Ontario?

Buyer Advice Dave Dubbin August 5, 2026

If you're buying a resale home, the answer is the one everyone hopes for: no, there is no HST on the purchase price of a previously lived-in home in Ontario. If you're buying a brand new home from a builder, the answer is yes, HST applies, but a stack of rebates, including a new federal one worth up to $50,000 for first-time buyers, means most people pay far less of it than they fear. Here's the plain-language version of how it all works.

Budgeting a purchase and want real numbers for your situation? Reach out and we'll walk through it together.

Resale homes: the price is the price

Used residential housing is exempt from HST in Ontario. Buy a 1950s bungalow in Alderwood or a ten year old condo in Humber Bay and the number on the agreement is the number, no 13 percent on top. This is the single most common tax question we get from first-time buyers, and the relief on people's faces when they hear the answer never gets old. What you will pay on a resale purchase is land transfer tax, which is its own conversation, and in Toronto it's a double one.

New construction: HST applies, rebates do the heavy lifting

A newly built home from a builder is subject to the full 13 percent HST, which is 5 percent federal GST plus 8 percent Ontario PST. In MBA speak, new housing is a taxable supply. In plain English, the government treats a new condo like a new car, not like a used house.

Before you panic about 13 percent on an $800,000 condo, two long-standing rebates kick in. Ontario rebates 75 percent of its 8 percent share, up to $24,000, on virtually every new home. There's also a federal rebate of up to $6,300, though it phases out entirely above $450,000, which is why most Toronto buyers never see it. Here's the part that trips people up: builders almost always advertise prices with HST and rebates already baked in, and you assign the rebates to the builder at closing. The sticker price you see is usually the price you pay, as long as you qualify, and the main qualification is that you or a close family member will live in the home. Investors who rent the unit out instead use a parallel rebate with its own paperwork.

The new first-time buyer rebate is a genuinely big deal

As of this spring, there's a second layer. The federal First-Time Home Buyers' GST Rebate became law in March 2026, and it removes 100 percent of the federal GST on a new home priced under $1 million for qualifying first-time buyers. That's worth up to $50,000 depending on price. Between $1 million and $1.5 million the rebate shrinks on a straight line, which in practical terms means every dollar of price above $1 million costs you about ten cents of rebate. It applies to builder agreements signed from March 20, 2025 through 2030, and builders can now credit it directly at closing. The details and forms live with the Canada Revenue Agency. If you're a first-time buyer weighing resale against new construction anywhere in Etobicoke's pipeline of new projects, this rebate belongs in your math.

Running your full budget? These cover the rest of it:

Where HST always shows up

Even on a resale purchase, HST applies to the services around the deal: legal fees, home inspection, appraisal, movers, and real estate commission, which the seller pays. One sneaky line item worth knowing: if your down payment is under 20 percent and you need mortgage default insurance, Ontario charges 8 percent provincial sales tax on that insurance premium, and unlike the premium itself, the tax can't be rolled into the mortgage. It's due in cash on closing day. On a large premium that can be a few thousand dollars nobody warned you about.

A few edge cases

Assignment sales, where you buy someone's pre-construction contract before the building is done, have their own HST rules and they've tightened in recent years. Substantially renovated homes can be treated like new for HST purposes. And cottages, vacant land, and mixed-use properties each play by different rules. None of this fits in a paragraph, which is exactly why your offer should be conditional on a lawyer's review in these situations.

The bottom line

Resale: no HST on the price, budget for land transfer tax and closing costs instead. New build: the advertised price usually has HST handled, and first-time buyers now have a legitimate five-figure rebate on the table. One honest caveat from us: we're realtors, not accountants, so before you sign anything, run your specific numbers past your accountant or real estate lawyer. That's not us covering ourselves, that's just how you buy well.

Weighing new construction against resale this fall? Browse what's on the market or send us a note, and we'll help you compare the real, all-in numbers.

Dave Dubbin
Real Estate Expert
Dave Dubbin & Associates
Real Estate Broker for Etobicoke and Toronto