Regulations Amending the New Harmonized Value-added Tax System Regulations, No. 2 and the Real Property (GST/HST) Regulations: SOR/2026-94

Canada Gazette, Part II, Volume 160, Number 12

Registration
SOR/2026-94 May 29, 2026

EXCISE TAX ACT

P.C. 2026-502 May 29, 2026

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, makes the annexed Regulations Amending the New Harmonized Value-added Tax System Regulations, No. 2 and the Real Property (GST/HST) Regulations under sections 277^{footnote a} and 277.1^{footnote b} of the Excise Tax Act ^{footnote c}.

Regulations Amending the New Harmonized Value-added Tax System Regulations, No. 2 and the Real Property (GST/HST) Regulations

New Harmonized Value-added Tax System Regulations, No. 2

1 Section 40 of the New Harmonized Value-added Tax System Regulations, No. 2 ^{footnote 1} is amended by striking out “and” at the end of paragraph (c) and by replacing paragraph (d) with the following:

• (d) only one of those individuals may apply for a rebate under subsection 256.21(1) of the Act in respect of the residential complex or share, the amount of which is determined under subsection 41(2), 43(1), 45(2) or 46(2); and
• (e) only one of those individuals may apply for a rebate under subsection 256.21(1) of the Act in respect of the residential complex or share, the amount of which is determined under subsection 41(2.1), 43(1.1), 45(2.1) or 46(2.1), and the individual that applies for that rebate must meet the criteria set out in
  • (i) paragraph 254(2.1)(e) of the Act in the case of a rebate the amount of which is determined under subsection 41(2.1),
  • (ii) paragraph 254.1(2.1)(e) of the Act in the case of a rebate the amount of which is determined under subsection 43(1.1),
  • (iii) paragraph 255(2.1)(e) of the Act in the case of a rebate the amount of which is determined under subsection 45(2.1), and
  • (iv) paragraph 256(2.1)(c) of the Act in the case of a rebate the amount of which is determined under subsection 46(2.1).

2 (1) Section 41 of the Regulations is amended by adding the following after subsection (2):

Additional rebate in Ontario — first-time home buyer

(2.1) For the purposes of subsection 256.21(1) of the Act, if an individual is entitled to claim a rebate under subsection 254(2.1) of the Act in respect of a residential complex acquired for use in Ontario as the primary place of residence of the individual, the individual is a prescribed person and the amount of a rebate in respect of the residential complex under subsection 256.21(1) of the Act — in addition to the amount of any rebate payable under subsection 256.21(1) of the Act, the amount of which is determined under subsection (2), that the individual is entitled to claim in respect of the residential complex — is equal to

• (a) if the total (in this subsection referred to as the “total consideration”) of all amounts, each of which is the consideration payable for the supply to the individual of the residential complex or for any other taxable supply to the individual of an interest in the residential complex, is not more than $1,000,000, the amount determined by the formula

  A − B

  where

  A

  is the lesser of $80,000 and the total of all tax under subsection 165(2) of the Act paid in respect of the supply of the residential complex to the individual or in respect of any other supply to the individual of an interest in the residential complex, and

  B

  is the amount of any rebate under subsection 256.21(1) of the Act, the amount of which is determined under subsection (2), that the individual is entitled to claim in respect of the residential complex; and

• (b) if the total consideration is more than $1,000,000 but less than $1,500,000, the amount determined by the formula

  (C × (($1,500,000 − D) ÷ $500,000)) − E

  where

  C

  is the lesser of $80,000 and the total of all tax under subsection 165(2) of the Act paid in respect of the supply of the residential complex to the individual or in respect of any other supply to the individual of an interest in the residential complex,

  D

  is the total consideration, and

  E

  is the amount of any rebate under subsection 256.21(1) of the Act, the amount of which is determined under subsection (2), that the individual is entitled to claim in respect of the residential complex.

(2) Subsections 41(4) and (5) of the Regulations are replaced by the following:

Application for rebate

(4) For the purposes of subsection 256.21(2) of the Act, an application for a rebate, the amount of which is determined under subsection (2) or (2.1), must be filed within two years after the day on which ownership of the residential complex is transferred to the individual.

Restriction

(5) The Minister shall pay a rebate in respect of a residential complex to an individual under subsection 256.21(1) of the Act, the amount of which is determined under subsection (2) or (2.1), only if the individual does not make an application for a rebate in respect of the residential complex under subsection 256(2) of the Act and does not make an application for a rebate in respect of the residential complex under subsection 256(2.1) of the Act.

(3) The portion of subsection 41(6) of the Regulations before paragraph (a) is replaced by the following:

Application to builder

(6) For the purposes of the application of subsection 256.21(3) of the Act in respect of a rebate in relation to a residential complex, the amount of which is determined under subsection (2) or (2.1),

(4) Paragraph 41(6)(b) of the Regulations is replaced by the following:

• (b) an individual who is a prescribed person under subsection (2) or (2.1), as the case may be, in respect of the complex is an individual of a prescribed class; and

(5) Subparagraph 41(6)(c)(ii) of the Regulations is replaced by the following:

• (ii) the builder agrees to pay to, or to credit to or in favour of, the individual any rebate under subsection 256.21(1) of the Act, the amount of which is determined under subsection (2) or (2.1), as the case may be, that is payable to the individual in respect of the complex,

3 (1) Section 43 of the Regulations is amended by adding the following after subsection (1):

Additional rebate in Ontario — first-time home buyer

(1.1) For the purposes of subsection 256.21(1) of the Act, if an individual is entitled to claim a rebate under subsection 254.1(2.1) of the Act in respect of a residential complex situated in Ontario, the individual is a prescribed person and the amount of a rebate in respect of the residential complex under subsection 256.21(1) of the Act — in addition to the amount of any rebate payable under subsection 256.21(1) of the Act, the amount of which is determined under subsection (1), that the individual is entitled to claim in respect of the residential complex — is equal to

• (a) if the fair market value of the residential complex, at the time possession of the residential complex is given to the individual under the agreement for the supply of the residential complex to the individual, is not more than $1,130,000, the amount determined by the formula

  A − B

  where

  A

  is the lesser of $80,000 and 7.08% of the total consideration (within the meaning of paragraph 254.1(2)(h) of the Act) in respect of the residential complex, and

  B

  is the amount of any rebate under subsection 256.21(1) of the Act, the amount of which is determined under subsection (1), that the individual is entitled to claim in respect of the residential complex; and

• (b) if the fair market value referred to in paragraph (a) is more than $1,130,000 but less than $1,695,000, the amount determined by the formula

  (C × (($1,695,000 − D) ÷ $565,000)) − E

  where

  C

  is the lesser of $80,000 and 7.08% of the total consideration (within the meaning of paragraph 254.1(2)(h) of the Act) in respect of the residential complex,

  D

  is the fair market value, and

  E

  is the amount of any rebate under subsection 256.21(1) of the Act, the amount of which is determined under subsection (1), that the individual is entitled to claim in respect of the residential complex.

(2) Subsection 43(3) of the Regulations is replaced by the following:

Application for rebate

(3) For the purposes of subsection 256.21(2) of the Act, an application for a rebate, the amount of which is determined under subsection (1) or (1.1), must be filed within two years after the day on which possession of the residential complex is transferred to the individual.

(3) The portion of subsection 43(4) of the Regulations before paragraph (a) is replaced by the following:

Application to builder

(4) For the purposes of the application of subsection 256.21(3) of the Act in respect of a rebate in relation to a residential complex, the amount of which is determined under subsection (1) or (1.1),

(4) Paragraph 43(4)(b) of the Regulations is replaced by the following:

• (b) an individual who is a prescribed person under subsection (1) or (1.1), as the case may be, in relation to the complex is an individual of a prescribed class; and

(5) Subparagraph 43(4)(c)(ii) of the Regulations is replaced by the following:

• (ii) the builder agrees to pay to, or to credit to or in favour of, the individual any rebate under subsection 256.21(1) of the Act, the amount of which is determined under subsection (1) or (1.1), as the case may be, that is payable to the individual in respect of the complex, and

4 (1) Section 45 of the Regulations is amended by adding the following after subsection (2):

Additional rebate in Ontario — first-time home buyer

(2.1) For the purposes of subsection 256.21(1) of the Act, if an individual is entitled to claim a rebate under subsection 255(2.1) of the Act in respect of a share of the capital stock of a cooperative housing corporation that the individual has acquired for the purpose of using a residential unit in a residential complex of the cooperative housing corporation that is situated in Ontario as the primary place of residence of the individual and if the cooperative housing corporation has paid tax under subsection 165(2) of the Act in respect of a taxable supply to the cooperative housing corporation of the residential complex, the individual is a prescribed person and the amount of a rebate in respect of the share under subsection 256.21(1) of the Act — in addition to the amount of any rebate payable under subsection 256.21(1) of the Act, the amount of which is determined under subsection (2), that the individual is entitled to claim in respect of the share — is equal to

• (a) if the total (in this subsection referred to as the “total consideration”) of all amounts, each of which is the consideration payable for the supply to the individual of the share or an interest in the cooperative housing corporation, residential complex or residential unit, is not more than $1,130,000, the amount determined by the formula

  A − B

  where

  A

  is the lesser of $80,000 and 7.08% of the total consideration, and

  B

  is the amount of any rebate under subsection 256.21(1) of the Act, the amount of which is determined under subsection (2), that the individual is entitled to claim in respect of the share; and

• (b) if the total consideration is more than $1,130,000 but less than $1,695,000, the amount determined by the formula

  (C × (($1,695,000 − D) ÷ $565,000)) − E

  where

  C

  is the lesser of $80,000 and 7.08% of the total consideration,

  D

  is the total consideration, and

  E

  is the amount of any rebate under subsection 256.21(1) of the Act, the amount of which is determined under subsection (2), that the individual is entitled to claim in respect of the share.

(2) Subsection 45(4) of the Regulations is replaced by the following:

Application for rebate

(4) For the purposes of subsection 256.21(2) of the Act, an application for a rebate, the amount of which is determined under subsection (2) or (2.1), must be filed within two years after the day on which ownership of the share is transferred to the individual.

5 (1) Paragraph 46(2)(b) of the Regulations is replaced by the following:

• (b) the individual has paid all of the tax payable by the individual in respect of the supply by way of sale to the individual of the land that forms part of the complex or an interest in the land or in respect of the supply to, importation by, or bringing into Ontario by, the individual of any improvement to the land or, in the case of a mobile home or floating home, of the complex (the total of which tax under subsection 165(2) and sections 212.1, 218.1 and 220.05 to 220.07 of the Act is referred to in this subsection as the “total tax in respect of the province”),

(2) Section 46 of the Regulations is amended by adding the following after subsection (2):

Additional rebate in Ontario — first-time home buyer

(2.1) If

• (a) an individual is entitled to claim a rebate under subsection 256(2.1) of the Act in respect of a residential complex that is for use in Ontario as the primary place of residence of the individual, and
• (b) the individual has paid all of the tax payable by the individual in respect of the supply by way of sale to the individual of the land that forms part of the residential complex or an interest in the land or in respect of the supply to, importation by, or bringing into Ontario by, the individual of any improvement to the land or, in the case of a mobile home or floating home, of the residential complex (the total of which tax under subsection 165(2) and sections 212.1, 218.1 and 220.05 to 220.07 of the Act is referred to in this subsection as the “total tax in respect of the province”),

for the purposes of subsection 256.21(1) of the Act, the individual is a prescribed person and the amount of a rebate in respect of the residential complex under subsection 256.21(1) of the Act — in addition to the amount of any rebate payable under subsection 256.21(1) of the Act, the amount of which is determined under subsection (2), that the individual is entitled to claim in respect of the residential complex — is equal to

(A × (($1,500,000 − B) ÷ $500,000)) − C

where

A

is the lesser of $80,000 and the total tax in respect of the province paid before

• (i) if the fair market value of the residential complex referred to in paragraph 256(2)(b) of the Act is less than $450,000, an application for the rebate under subsection 256(2) of the Act in respect of the residential complex is filed with the Minister in accordance with subsection 256(3) of the Act, and
• (ii) in any other case, an application for the rebate under subsection 256(2.1) of the Act in respect of the residential complex is filed with the Minister in accordance with subsection 256(3) of the Act;

B

is the greater of $1,000,000 and the fair market value referred to in subparagraph (i) of the description of A; and

C

is the amount of any rebate under subsection 256.21(1) of the Act, the amount of which is determined under subsection (2), that the individual is entitled to claim in respect of the residential complex.

(3) Subsection 46(4) of the Regulations is replaced by the following:

Homes occupied before substantial completion

(4) If an individual acquires an improvement in respect of a residential complex and tax in respect of the improvement becomes payable by the individual more than two years after the day on which the residential complex is first occupied as described in subparagraph 256(2)(d)(i) of the Act, that tax shall not be included in determining, for the residential complex, the total tax in respect of the province for the purposes of subsections (2) and (2.1).

(4) Paragraph 46(5)(b) of the Regulations is replaced by the following:

• (b) the particular individual does not file with the Minister or submit to the supplier an application for a rebate in respect of the home under section 254 or 254.1 of the Act or for a rebate in respect of the home under section 256.21 of the Act the amount of which is determined under subsection 41(2) or (2.1) or 43(1) or (1.1);

(5) The portion of subsection 46(6) of the Regulations before paragraph (a) is replaced by the following:

Application for rebate

(6) For the purposes of subsection 256.21(2) of the Act, an application for a rebate in relation to a residential complex, the amount of which is determined under subsection (2) or (2.1), must be filed on or before

(6) Paragraph 46(6)(c) of the Regulations is replaced by the following:

• (c) if paragraph (b) does not apply, any day after the due date that is set out in a written request filed with the Minister by the individual referred to in subsection (2) or (2.1), as the case may be, and that is satisfactory to the Minister.

6 (1) The description of B in subsection 47(5) of the Regulations is replaced by the following:

B is the total of

• (i) the amount of the rebate, if any, under subsection 256.21(1) of the Act, the amount of which is determined under subsection 43(1), that the recipient of the exempt supply by way of sale referred to in subparagraph 256.2(4)(a)(i) of the Act is entitled to claim in respect of the complex or unit, and
• (ii) the amount of the rebate, if any, under subsection 256.21(1) of the Act, the amount of which is determined under subsection 43(1.1), that the recipient of the exempt supply by way of sale referred to in subparagraph 256.2(4)(a)(i) of the Act is entitled to claim in respect of the complex or unit.

(2) The description of B in subsection 47(7) of the Regulations is replaced by the following:

B is the total of

• (i) the amount of the rebate, if any, under subsection 256.21(1) of the Act, the amount of which is determined under subsection 45(2), that the recipient of the exempt supply of the unit referred to in paragraph 256.2(5)(c) of the Act is entitled to claim in respect of the unit, and
• (ii) the amount of the rebate, if any, under subsection 256.21(1) of the Act, the amount of which is determined under subsection 45(2.1), that the recipient of the exempt supply of the unit referred to in paragraph 256.2(5)(c) of the Act is entitled to claim in respect of the unit.

Real Property (GST/HST) Regulations

7 (1) The portion of subsection 5(1.1) of the Real Property (GST/HST) Regulations ^{footnote 2} before paragraph (a) is replaced by the following:

Rebate of provincial component — New Brunswick

(1.1) Subject to subsections (6) and (7), if a person is entitled to claim a rebate under subsection 256.2(3) of the Act in respect of a taxable supply of a residential complex, an interest in a residential complex or an addition to a multiple unit residential complex, if the residential complex is situated in New Brunswick and if subsection 256.2(3.1) of the Act would apply in respect of the taxable supply of the residential complex, interest or addition if the references in paragraph 4(1)(b) and in paragraphs 256.2(3.1)(a) and (b) of the Act to “September 13, 2023”, “2031” and “2036” were read as references to “November 14, 2024”, “2028” and “2030”, respectively, the following rules apply for the purposes of subsection 256.21(1) of the Act:

(2) Section 5 of the Regulations is amended by adding the following before subsection (2):

Rebate for student residence — provincial component

(1.2) Subject to subsections (6) and (7), if a person that is a builder of a residential complex or an addition to a multiple unit residential complex is entitled to claim a rebate under subsection 256.2(3) of the Act in respect of the construction or substantial renovation of the residential complex or addition, as the case may be, if the residential complex or addition is situated in Ontario, Nova Scotia, Prince Edward Island or Newfoundland and Labrador and if the conditions set out in subsection 256.2(3.3) of the Act are met in respect of the construction or substantial renovation of the residential complex or addition, the following rules apply for the purposes of subsection 256.21(1) of the Act:

• (a) subsection (1) and section 47 of the New Harmonized Value-added Tax System Regulations, No. 2 do not apply in respect of the residential complex or addition; and
• (b) the person is a prescribed person and the amount of the rebate under subsection 256.21(1) of the Act in respect of the residential complex or addition is equal to the total of all amounts each of which is an amount, in respect of each residential unit that forms part of the residential complex or addition and that is a qualifying residential unit of the person at the particular time referred to in paragraph 256.2(3.3)(c) of the Act in respect of the construction or substantial renovation of the residential complex or addition, equal to the amount determined by the formula

  (A − B) × C

  where

  A

  is the amount that the person would have been entitled to claim under section 193 or 257 of the Act in respect of the taxable supply by way of sale of the residential complex or addition that would have been deemed under section 191 of the Act to have been made and received by the person in respect of the construction or substantial renovation of the residential complex or addition in the absence of subsection 191(6) of the Act,

  B

  is the amount that the person would have been entitled to claim under section 193 or 257 of the Act in respect of the taxable supply by way of sale of the residential complex or addition that would have been deemed under section 191 of the Act to have been made and received by the person in respect of the construction or substantial renovation of the residential complex or addition in the absence of subsection 191(6) of the Act, determined as if the reference in section 193 or 257 of the Act, as the case may be, to “basic tax content” were read as a reference to “qualifying portion of basic tax content (as defined in subsection 256.2(1))”, and

  C

  is

  • (i) if the residential complex or addition is situated in Prince Edward Island, the amount determined by the formula

    D × E

    where

    D

    is the lesser of the unit’s percentage of total floor space and the quotient, expressed as a percentage, determined by dividing $350,000 by the fair market value of the residential complex or addition, and

    E

    is

    • (A) if the construction or substantial renovation of the residential complex or addition is substantially completed before 2029, 100%,
    • (B) if the construction or substantial renovation of the residential complex or addition is substantially completed in 2029, 90%,
    • (C) if the construction or substantial renovation of the residential complex or addition is substantially completed in 2030, 80%,
    • (D) if the construction or substantial renovation of the residential complex or addition is substantially completed in 2031, 70%,
    • (E) if the construction or substantial renovation of the residential complex or addition is substantially completed in 2032, 60%,
    • (F) if the construction or substantial renovation of the residential complex or addition is substantially completed in 2033, 50%,
    • (G) if the construction or substantial renovation of the residential complex or addition is substantially completed in 2034, 40%, and
    • (H) if the construction or substantial renovation of the residential complex or addition is substantially completed in 2035, 30%, and

  • (ii) in any other case, the unit’s percentage of total floor space.

(3) The portion of subsection 5(1.2) of the Regulations before paragraph (b) is replaced by the following:

Rebate for student residence — provincial component

(1.2) Subject to subsections (1.3), (6) and (7), if a person that is a builder of a residential complex or an addition to a multiple unit residential complex is entitled to claim a rebate under subsection 256.2(3) of the Act in respect of the construction or substantial renovation of the residential complex or addition, as the case may be, if the residential complex or addition is situated in Ontario, Nova Scotia, New Brunswick, Prince Edward Island or Newfoundland and Labrador and if the conditions set out in subsection 256.2(3.3) of the Act are met in respect of the construction or substantial renovation of the residential complex or addition, the following rules apply for the purposes of subsection 256.21(1) of the Act:

• (a) subsections (1) and (1.1) and section 47 of the New Harmonized Value-added Tax System Regulations, No. 2 do not apply in respect of the residential complex or addition; and

(4) Section 5 of the Regulations is amended by adding the following after subsection (1.2):

Student residence situated in New Brunswick

(1.3) For the purpose of applying subsection (1.2) in respect of the construction or substantial renovation of a residential complex, or an addition to a multiple unit residential complex, that is situated in New Brunswick, subparagraph 256.2(3.3)(d)(ii) of the Act is to be read as follows:

• (ii) the taxable supply and the residential complex or addition
  • (A) meet the conditions prescribed for the purposes of subsection (3.1), and
  • (B) would meet the conditions described in paragraph (3.1)(a) or (b) if the references in those paragraphs to “September 13, 2023”, “2031” and “2036” were read as references to “November 14, 2024”, “2028” and “2030”, respectively.

(5) Subsection 5(2) of the Regulations is replaced by the following:

(2) For the purposes of subsection 256.21(2) of the Act, an application for a rebate, the amount of which is determined under this section, must be filed within

• (a) if the amount of the rebate is determined under subsection (1), two years after the end of the month in which tax first becomes payable by the person, or is deemed to have been paid by the person, in respect of the residential complex, interest or addition, as the case may be; or
• (b) if the amount of the rebate is determined under subsection (1.2), two years after the later of March 26, 2026 and the last day of the month that includes the particular time referred to in paragraph 256.2(3.3)(c) of the Act in respect of the construction or substantial renovation of the residential complex or addition.

(6) Paragraph 5(2)(a) of the Regulations is replaced by the following:

• (a) if the amount of the rebate is determined under subsection (1) or (1.1), two years after the end of the month in which tax first becomes payable by the person, or is deemed to have been paid by the person, in respect of the residential complex, interest or addition, as the case may be; or

Coming into Force

8 (1) Sections 1 to 6 are deemed to have come into force on March 20, 2025.

(2) Subsections 7(1), (3), (4) and (6) are deemed to have come into force on November 15, 2024.

(3) Subsections 7(2) and (5) are deemed to have come into force on September 14, 2023.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Ontario first-time home buyers’ rebate

On October 28, 2025, the Government of Ontario announced that the province would offer a temporary rebate of the 8% Ontario component of the harmonized sales tax (HST), which would generally mirror the federal First-Time Home Buyers’ Goods and Services Tax (GST) Rebate. On March 12, 2026, the Making Life More Affordable for Canadians Act received royal assent, thereby enacting the federal rebate.

Under the terms of an agreement that Ontario has entered into with Canada (the bilateral Comprehensive Integrated Tax Coordination Agreement), the province is entitled to introduce this provincial rebate, which will be federally administered. The Regulations are needed to implement this provincial decision.

Enhanced GST Rental Rebate — student residence rules

Between fall 2023 and fall 2024, the Government of Ontario, the Government of Nova Scotia, the Government of New Brunswick, the Government of Prince Edward Island and the Government of Newfoundland and Labrador announced that they would offer a temporary rebate of the provincial component of the HST, which would generally mirror the 100% federal GST rebate for new purpose-built rental housing (the federal Enhanced GST Rental Rebate), including any refinements to that rebate that may occur from time to time. These provincial HST rebates were implemented in 2024 and 2025 by federal regulations.

On March 26, 2026, the Budget 2025 Implementation Act, No. 1 received royal assent, thereby enacting amendments to the federal Enhanced GST Rental Rebate’s application to student residences. The Government of Canada is obligated to make corresponding changes to relevant provincial HST rebates to honour its contractual obligation to ensure the provincial governments’ tax policy decision (i.e. to mirror the federal Enhanced GST Rental Rebate) is maintained. Therefore, these Regulations are needed to amend the federal regulations that implement the corresponding provincial Enhanced HST Rental Rebate.

Background

Canada has entered into a Comprehensive Integrated Tax Coordination Agreement (CITCA) with the provinces of Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador. Each CITCA is a bilateral federal-provincial agreement that sets out the parameters that govern the HST in the province. The HST is levied under federal legislation on the same tax base as the GST and is administered by the Canada Revenue Agency (CRA). Under the CITCA, the province is entitled to some elements of provincial tax policy flexibility, such as establishing the rate of its provincial component of the HST, limited point-of-sale rebates for its provincial component of the HST and the provincial rate and thresholds for certain targeted rebates (including rebates in respect of new housing and new rental housing).

Under the Provincial Choice Tax Framework Act, the Parliament approved the mechanisms to facilitate select changes in the operation of the provincial component of the HST by way of federal regulations. For example, the Provincial Choice Tax Framework Act puts in place a framework to accommodate any province’s decision to change the rate of the provincial component of the HST and the parameters of certain rebates that apply in that province. Federal regulations are therefore the appropriate means by which to implement provincial tax policy flexibility in respect of rebates of the provincial component of the HST related to new housing and new rental housing.

Ontario first-time home buyers’ rebate

The Making Life More Affordable for Canadians Act, which received royal assent on March 12, 2026, amended Part IX of the Excise Tax Act (the Act) to enact legislation for a rebate of the GST, or the federal component of the HST, for new housing purchased by first-time home buyers. To qualify, first-time home buyers must enter into an agreement of purchase and sale for the home on or after March 20, 2025, and before 2031, and construction or substantial renovation of the home must begin before 2031 and be substantially completed before 2036.

On October 28, 2025, the Government of Ontario announced its intention to introduce a rebate of the 8% Ontario component of the HST on new housing purchased by first-time home buyers. The commitment was reiterated in the Ontario’s 2025 Fall Economic Statement, released on November 6, 2025, and in a news release on March 25, 2026. To qualify for this provincial rebate, a transaction must satisfy the conditions of the federal First-Time Home Buyers’ GST Rebate.

Enhanced GST Rental Rebate — student residence rules

On September 14, 2023, the Government of Canada announced the removal of the GST and the federal component of the HST from new rental housing, such as apartment buildings, built specifically for long-term rental accommodation. The policy was implemented through a temporary 100% rebate of the GST, or the federal component of the HST, on new purpose-built rental housing. The legislative and regulatory amendments implementing this federal GST rebate were enacted between 2023 and 2025.

Soon after the Government of Canada’s announcement of the federal Enhanced GST Rental Rebate, the governments of Ontario, Nova Scotia, Prince Edward Island and Newfoundland and Labrador announced that they would also offer a temporary rebate of the provincial component of the HST for new purpose-built rental housing, which would generally mirror the new federal Enhanced GST Rental Rebate. In fall 2024, the Government of New Brunswick announced that the province would also offer a temporary full rebate of the 10% New Brunswick component of the HST, which would generally mirror the federal Enhanced GST Rental Rebate. The regulatory amendments implementing these provincial Enhanced HST Rental Rebates were made in 2024 and 2025.

On March 26, 2026, the Budget 2025 Implementation Act, No. 1 received royal assent, thereby enacting amendments to the federal Enhanced GST Rental Rebate’s application to student residences. These amendments extended the application of the federal Enhanced GST Rental Rebate to ensure that universities, public colleges and school authorities can generally claim equivalent relief of the GST in respect of new student housing projects.

Objective

The first objective is to formalize and give legal effect to the decision of Ontario to introduce a temporary rebate of the 8% Ontario component of the HST in respect of homes purchased by first-time home buyers, which would generally mirror the federal GST rebate for first-time home buyers. The second objective is to implement changes to the provincial Enhanced HST Rental Rebates in Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador to ensure those provincial governments’ tax policy decisions (i.e. to mirror the federal Enhanced GST Rental Rebate) are maintained.

Description

The Regulations implement a rebate in respect of the provincial component of the HST for new housing purchased by first-time home buyers in Ontario, based on the eligibility criteria set out in the federal First-Time Home Buyers’ GST Rebate. To qualify, first-time home buyers must enter into an agreement of purchase and sale for the home on or after March 20, 2025, and before 2031, and construction or substantial renovation of the home must begin before 2031 and be substantially completed before 2036.

Together with Ontario’s existing HST New Housing Rebate, the new Ontario rebate would provide relief of the full 8% provincial portion of the HST on qualifying new homes valued up to $1 million for first-time home buyers. For homes valued between $1 million and $1.5 million, the new rebate would follow the phased reduction under the proposed federal rebate. That means the rebate would be gradually reduced, as the price of a new home increases from $1 million to $1.5 million, to a minimum of $24,000 for homes valued between $1.35 million and $1.5 million. This ensures that the combined amount of relief available under both Ontario rebates would not be less than the amount that is currently provided through the existing Ontario HST New Housing Rebate.

The Regulations also extend the application of the provincial Enhanced HST Rental Rebate in Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador to ensure that universities, public colleges and school authorities can generally claim equivalent relief of the provincial HST in respect of new student housing projects in those provinces. The provincial portion of the HST is 8% in Ontario, 9% in Nova Scotia, and 10% in New Brunswick, Prince Edward Island and Newfoundland and Labrador. The Regulations also correct a technical deficiency (a missing cross-reference) in the existing rules in respect of the provincial Enhanced HST Rental Rebate in New Brunswick.

Regulatory development

Consultation

The Regulations implement the decision of the province of Ontario to provide a first-time home buyers rebate in respect of the Ontario component of the HST announced on October 28, 2025, November 6, 2025, and March 25, 2026. The Regulations also implement the 2024 and 2025 decisions of the provinces of Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador to mirror the federal Enhanced GST Rental Rebate by implementing the refinements in respect of student residences. These provinces, and stakeholders in these provinces, are awaiting the legal implementation of the refinements related to student residences that are contained in the Regulations.

The Regulations are exempt from prepublication in the Canada Gazette, Part I, because the measures implement a matter of provincial tax policy, the details of which were previously announced by those provincial governments.

Indigenous engagement, consultation and modern treaty obligations

The Regulations would implement a decision by the Government of Ontario to introduce a rebate in respect of the Ontario component of the HST for new housing purchased by first-time home buyers that generally mirrors an existing rebate in respect of the GST/federal component of the HST. The Regulations would also implement decisions of the governments of Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador to mirror the federal Enhanced GST Rental Rebate. The regulatory proposals are necessary for Canada to fulfill its obligations under each CITCA to implement the province’s desired tax changes to which it is entitled under the CITCA. Any impacts on Indigenous Peoples or treaty obligations associated with this measure would be attributable solely to provincial policy decisions and not to changes made to the GST/HST regulations.

The Regulations are not expected to have any impact in relation to Indigenous rights protected by section 35 of the Constitution Act, 1982, modern treaties or international human rights obligations.

Instrument choice

Under the Act, the Governor in Council has the authority to make regulations related to the application of the GST/HST. The Regulations are a necessary and appropriate mechanism for Canada to fulfill its obligations under the CITCA to implement the tax policy flexibility of each province. Therefore, no other instruments were considered.

Regulatory analysis

Benefits and costs

The Regulations formalize and give legal effect to the decision by Ontario to offer a first-time home buyers rebate in respect of the Ontario component of the HST. The Regulations also implement decisions of the governments of Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador to mirror the federal Enhanced GST Rental Rebate. As the Regulations relate to an exercise of provincial tax policy flexibility under each province’s CITCA, any benefits or costs are attributable to the provincial governments, and not the Government of Canada. Additionally, the foregone revenues because of the rebated sales tax would have been distributed to the relevant provinces in the absence of the amendments. Therefore, there will be no net impact on federal revenues. The Regulations are necessary for Canada to fulfill its obligations under each CITCA.

The CRA will need to modify some forms and update guidance because of the Regulations. Eligible recipients will need to complete an application process demonstrating eligibility to receive the relevant rebate. Marginal compliance costs associated with this activity are anticipated to be negligible, as applicants for the provincial portions of the rebate would have incurred these costs to receive the federal portion even in the absence of the Regulations.

Small business lens

The Regulations implement a decision by the Government of Ontario to introduce a rebate in respect of the Ontario component of the HST for new housing purchased by first-time home buyers that generally mirrors an existing rebate in respect of the GST/federal component of the HST. The Regulations also implement decisions of the governments of Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador to mirror the federal Enhanced GST Rental Rebate. To the extent that the Regulations impact businesses, they do not impose new costs on businesses, including small businesses.

One-for-one rule

The Regulations implement a decision by the Government of Ontario to introduce a rebate in respect of the 8% Ontario component of the HST for new housing purchased by first-time home buyers that generally mirrors an existing rebate in respect of the GST/federal component of the HST. The Regulations also implement decisions of the governments of Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador to mirror the federal Enhanced GST Rental Rebate. The Regulations do not impose new administrative requirements on stakeholders.

Regulatory cooperation and alignment

The Provincial Choice Tax Framework Act puts in place a framework to accommodate any province’s decision to change the rate of the provincial component of the HST and the parameters of certain rebates that apply in that province.

The Regulations enable the implementation of provincial tax policy flexibility for the HST in Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador in accordance with the CITCA between Canada and those provinces.

International obligations

The Regulations do not impact Canada’s international obligations.

Effects on the environment

Ontario’s decision to provide a rebate in respect of the provincial component of the HST is a tax policy decision of the province and not the Government of Canada. The decision of the governments of Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador to mirror the federal Enhanced GST Rental Rebate is a tax policy decision of the province, and not the federal government. Any environmental impacts associated with the Regulations are attributable solely to provincial policy decisions and not to changes made to the GST/HST regulations.

Gender-based analysis plus

Ontario’s decision to provide a first-time home buyers rebate in respect of the provincial component of the HST is a tax policy decision of the province and not the Government of Canada. The decision of the governments of Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador to mirror the federal Enhanced GST Rental Rebate is a tax policy decision of the provinces, and not the federal government. Any gender-based analysis plus (GBA+) impacts associated with this measure would be attributable solely to provincial policy decisions and not to changes made to the GST/HST regulations.

Implementation, compliance and enforcement, and service standards

The Regulations will be administered and enforced by the CRA. The rebate in respect of the 8% Ontario component of the HST for new housing purchased by first-time home buyers has a retroactive coming-into-force date of March 20, 2025, which is authorized under the Act. The measure in respect of the provincial Enhanced HST Rental Rebate has a retroactive coming-into-force date of September 14, 2023, in respect of Ontario, Nova Scotia (PDF), Prince Edward Island and Newfoundland and Labrador and November 15, 2024, in respect of New Brunswick, which is authorized under the Act. The two coming-into-force dates are due to the particular date a province indicated their intention to offer a provincial Enhanced HST Rental Rebate, with Ontario, Nova Scotia, Prince Edward Island and Newfoundland and Labrador doing so in 2023, shortly after the new federal GST rebate was announced on September 14, 2023, and New Brunswick doing so later on in 2024.

Contact

Amanda Riddell
Senior Director
Sales Tax Division
Tax Policy Branch
Department of Finance Canada
90 Elgin Street
Ottawa, Ontario
K1A 0G5