The Ontario Enhanced New Housing Rebate: What Builders Need to Know Before Their Next Closing

Ali Alsharif, CPA, MPAcc — Chrome Accounting

Ontario's temporary Enhanced New Housing Rebate (ENHR) is the largest change to HST relief on new homes in years. For a qualifying home under $1 million, a buyer can now recover the entire 13% HST — where the old rules capped provincial relief at $24,000.

For builders, that is both an opportunity and an administrative trap. The rebate can be credited at closing to lower the price a buyer pays, which is a genuine sales advantage. But the mechanics differ from the rebate you are used to, the filing is paper-only, and getting it wrong creates a liability that lands on you, not just the buyer.

Here is what actually matters.

What changed

The old Ontario new housing rebate returned 75% of the 8% provincial portion of the HST, capped at $24,000. That cap has not moved since it was introduced, and on today's prices most buyers absorbed a significant amount of HST.

The ENHR replaces that cap for qualifying agreements:

The ENHR is generally available where the agreement of purchase and sale is entered into between April 1, 2026 and March 31, 2027. That date is the gate. A pre-construction agreement signed in 2024 does not qualify, no matter when it closes.

The part builders miss: the 5% top-up is a separate program

Alongside the ENHR, Ontario provides the Ontario New Home Affordability Payment (ONHAP) — an amount of up to $50,000, equivalent to up to 100% of the 5% federal part of the HST.

This is what allows full 13% relief. But it is not a CRA rebate, and it does not work like one:

• It is paid by the Province of Ontario, not the CRA.
• You cannot deduct it on your GST/HST return. The CRA is explicit on this point.
• No separate application form is required — it is triggered by the consent sections in the rebate application.
• It is reduced by any federal new housing rebate or first-time home buyers' rebate the buyer is entitled to. The two are offsetting, not additive.

That last point catches people out. On a home priced above $450,000, the federal new housing rebate is fully phased out, so the ONHAP carries the whole 5%. Below $450,000, the buyer has a federal rebate — and the ONHAP shrinks correspondingly. The combined total stays the same; only the split changes.

How the money actually moves

If you credit the rebates at closing, the sequence is:

1. At closing — you credit the buyer both the 8% ENHR and the 5% ONHAP, reducing the amount payable.
2. On your GST/HST return — you report the HST collected on the sale and claim a deduction for the 8% only.
3. By mail — you send the completed Form GST190 and Form RC7190-ON to the CRA at the same time as your GST/HST return, for all sales in the reporting period where you credited rebates.
4. Afterward — provided the consent sections are completed, the CRA shares your information with Ontario once the application is assessed, and Ontario issues the ONHAP to you separately.

Two things follow from this that affect your cash position.

You are fronting the 5%. On a $479,000 home that is roughly $24,000 credited at closing and recovered only after the CRA assesses the application and Ontario processes the payment. Plan for the gap.

Electronic filing is not available. The CRA has confirmed that these applications must be filed by mail, with updates to allow electronic filing expected in fall 2026. If your process assumes online submission, it needs adjusting.

The liability builders should take seriously

This is the provision worth reading twice. Where a builder credits a rebate amount to a buyer and knew or ought to have known that the buyer was not entitled to it, or that the amount credited exceeded the entitlement, the builder and buyer are jointly and severally liable to repay the amount to the CRA.

In practice that means the eligibility review is not a formality you delegate to the buyer. The primary-residence condition, the agreement date, the construction timing — these are conditions you have an interest in verifying, because a credited rebate that turns out not to be payable comes back to you.

A signed eligibility representation from the buyer, held on file, is cheap insurance.

Five questions to check on every file

1. What date was the agreement of purchase and sale signed? Not the closing date. This single fact determines whether the ENHR applies at all.
2. Is the home the buyer's, or a relation's, primary place of residence? Rentals do not qualify for this rebate.
3. Has any rebate already been credited or claimed? If a standard rebate was credited at closing, it must be netted on the application, or you double-count.
4. Has the buyer assigned both the rebate and the ONHAP to you? These are distinct. Assigning one does not assign the other, and it determines who receives the 5%.
5. Are both consent sections completed? If not, Ontario does not receive the information it needs, and the ONHAP does not get paid.

The bottom line

For a builder, the ENHR is a real commercial tool. Being able to tell a buyer that the HST comes off the price at closing — rather than being something they pay now and chase later — is a meaningful advantage in a slow market.

But it is a temporary program with a hard date window, a paper filing process, a cash-flow gap on the 5%, and a joint liability provision that puts the builder on the hook for eligibility. It rewards builders who have their documentation in order and punishes those who treat it as a checkbox.

If you are a builder in Ontario working through an ENHR file and want a second set of eyes on the calculation or the forms before they go to the CRA, that is exactly the kind of work I do.

This article is general information current as of August 2026 and is not advice for any specific transaction. The ENHR is a new program and CRA administrative guidance continues to develop. For technical enquiries, GST/HST Rulings can be reached at 1-800-959-8287; for ONHAP questions, ServiceOntario at 1-800-267-8097.