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- ⏰ Ontario's $130,000 Enhanced HST Rebate Just Became Bill 114
⏰ Ontario's $130,000 Enhanced HST Rebate Just Became Bill 114
Christian Janisse
May 06, 2026
Your Buyers Are Asking About the $130,000 HST Rebate. Bill 114 Finally Clarifies What Happens on Closing.
After 41 days of silence, we finally have movement on Ontario’s proposed $130,000 HST relief program for new homes.
Since the March 25, 2026 Ontario Budget announcement, we have been tracking this daily. Until yesterday, there was no bill, no draft regulations, no application process, and no real guidance on how the program would actually work in practice.
That changed on May 5, 2026.
Ontario introduced Bill 114, released an updated technical backgrounder, and confirmed new details about qualification criteria, builder credits, closing mechanics, and how the rebate process is expected to operate.
Most importantly, we now have a clearer answer to the question buyers, agents, and lenders have all been asking:
“Does the enhanced rebate actually come off the purchase price at closing?”
Right now, the answer is no.
Here is what changed, what is still missing, and what your buyers need to know immediately.
The Update
On May 5, 2026, three things happened in a single news cycle:
The Minister of Finance announced that the federal government will transfer $875 million to Ontario to fund the provincial portion of the relief (source).
The Ministry of Finance updated its technical backgrounder explaining how the enhanced HST relief program will work (source).
The Ontario government introduced Bill 114, the HST Relief Implementation Act (Residential Property Rebates), 2026 (source).
By May 6, Bill 114 had cleared first reading and entered second reading debate.
Qualification Criteria
The original announcements were broad on who would qualify. The May 5 technical backgrounder confirms the specifics. The enhanced rebate uses the same eligibility criteria as the existing Ontario New Housing Rebate, plus additional conditions specific to the temporary program.
To qualify under the existing Ontario NHR criteria, all of these must be true.
The home is a new build or substantial renovation
The buyer is an individual (a natural person), not a corporation
The home will be the primary residence of the buyer or a related family member (a "relation" under the Excise Tax Act)
The home is on the eligible list (detached, semi-detached, duplex, condo, townhouse, rowhouse, co-op share, mobile home, or floating home)
To qualify for the enhanced program, your buyer must also meet these additional conditions.
The APS was signed on or after April 1, 2026 and on or before March 31, 2027
Construction begins by December 31, 2028 and is substantially completed by December 31, 2031 for builder purchases (tighter dates apply for owner-built)
Tax becomes payable by December 31, 2032
Note that investment or rental properties have their own criteria through the New Residential Rental Property Rebate, which has its own enhanced rules.
Builders Cannot Yet Credit the Enhanced Rebate at Closing
Builders cannot yet credit the enhanced rebate at closing under the current framework. If HST becomes payable before the required federal regulations are made, the buyer must currently pay the HST at closing and apply to CRA afterward to recover the enhanced portion.
Interestingly, the technical backgrounder stops short of saying a builder is legally prohibited from voluntarily fronting the enhanced rebate. The wording instead suggests that the formal builder-credit mechanism is not yet operational because the required federal regulations and CRA administrative framework do not yet exist.
In other words, the issue may not be whether a builder could theoretically absorb that risk contractually, but whether the government-backed assignment and reimbursement system needed to support it is actually in place yet.
Here is the practical impact. A buyer purchasing a $1 million new home still faces $130,000 in HST on closing.
Assuming the buyer otherwise qualifies and assigns the existing rebate to the builder, the existing Ontario NHR can continue to reduce that amount by up to $24,000 at closing, as it has under the existing program.
The remaining $106,000 must currently be funded on closing and recovered later through the enhanced rebate process.
What's Actually in Bill 114
Bill 114 amends the Retail Sales Tax Act and gives the Minister of Finance the legal authority to make regulations that pay buyers up to $50,000 each on eligible new home purchases. It locks the agreement of purchase and sale eligibility deadline at March 31, 2027. And it expressly authorizes buyers to assign the payment to their builder, which is how the credit will eventually come off the price at closing.
That is important because it confirms Ontario clearly intends for builders to eventually apply the relief as an upfront closing credit, similar to how the existing rebate structure works today. The current issue appears to be implementation timing, not the long-term structure of the program.
However, at this point, the federal regulations have not been made. Bill 114 has been introduced but is not yet law. Ontario has indicated that further provincial regulations are expected to follow once the federal regulations are in place.
Track Bill 114 Yourself
The Legislative Assembly publishes a real-time status page. Every reading, every vote, every committee step shows up there.
When the page shows third reading carried, the bill has passed. When it shows Royal Assent, it is law. Even after Royal Assent, the federal and provincial regulations still need to be finalized before the enhanced rebate framework becomes fully operational.
Key Takeaways (Without the Legalese)
1/ Bill 114 is real and moving. The federal regulations still appear to be pending.
When buyers ask if the program is happening, the honest answer is yes for the $50,000 piece running through Bill 114 (Ontario's job, in motion) and still pending for the $80,000 piece running through federal regulations (Canada's job, no movement yet). Both pieces have to land before applications open.
2/ The new enhanced HST rebate cannot be credited at closing today. Eligible buyers pay it and recover it later.
Tell your buyers now. For deals closing before the required regulations are made, the enhanced HST relief is not expected to come off the purchase price at closing.
Under the current framework, if HST becomes payable before the required federal regulations are made, eligible buyers must fund the HST at closing, less any rebate still creditable under the existing program, and apply later for the enhanced portion once the process is available.
There is no government timeline on when that happens. That timing uncertainty creates a real financing issue for buyers who assumed the enhanced rebate would automatically reduce their closing funds required. In many cases, lender pre-approvals, builder worksheets, and buyer expectations were built around that assumption.
3/ There is a cash-to-close problem, not a tax problem. Recheck the math.
We are already seeing buyers, agents, and lenders assuming the enhanced rebate comes off the statement of adjustments automatically. Right now, that assumption can create a six-figure shortfall on closing.
If the APS or pre-approval was built around the new rebate coming off at closing, the math has changed. A $1 million (pre-tax) buyer can be short up to $106,000 ($130,000, less the existing $24,000 rebate) on closing day. They recover it later. They need it at closing first. Confirm the numbers with the lender now, not closing week.
We will keep tracking this file every day. Expect another update from us when the federal regulations drop, when Bill 114 receives Royal Assent, or when applications open.
Sources
Got a new build file with a builder credit clause that does not add up? Reach out before your client signs!
Email us [email protected] or call 519-997-3775.
-Christian