New build vs resale in Ottawa: the real math, HST rebates included

Let me translate.

For years, the new-versus-resale debate in Ottawa sounded like a matter of taste. Shiny finishes and a warranty on one side; mature trees and an established street on the other. But underneath the taste question sits a tax question, and in 2026 that tax question got very loud. The sticker price is only half the story. The other half is who pays the HST, who gets the rebate, and when your agreement was signed.

“The biggest mistake buyers make when comparing a resale home to a new build is comparing the purchase price instead of comparing the actual cost of owning the home.”

— Gaurav Kapoor, REALTOR®

Here’s how the numbers actually work.

Why the tax only hits new homes

The Canada Revenue Agency puts it plainly: sales of used owner-occupied homes are usually exempt, because the owner isn’t a builder. Only homes sold by builders are taxable. In Ontario, that tax is the 13% HST: a 5% federal part and an 8% provincial part.

So when you buy a resale home in Barrhaven or Kanata from the family who lived there, there’s normally no HST on the price. When you buy a brand-new home from a builder in the same neighbourhood, there is. That’s the gap the rebates are trying to close.

The 2026 rebates, in plain English

1. For most buyers: the temporary Ontario relief

Two pieces work together, and you don’t have to be a first-time buyer:

• The Ontario enhanced new housing rebate covers up to 100% of the 8% provincial part, to a maximum of $80,000.
• The Ontario new home affordability payment covers up to 100% of the 5% federal part, to a maximum of $50,000. There’s no separate Ontario application; it rides on the same CRA forms.

To qualify when buying from a builder, the home must be your (or a relation’s) primary place of residence, the agreement of purchase and sale must be signed on or after April 1, 2026 and on or before March 31, 2027, construction must begin by December 31, 2028, and the home must be substantially completed by December 31, 2031.

New home price	Provincial 8% relief	Federal 5% relief
$1 million or less	Full, up to $80,000	Full, up to $50,000
$1 million to $1.5 million	Flat $80,000	Flat $50,000
$1.5 million to $1.85 million	Partial	Partial
$1.85 million and up	Regular Ontario rebate only (up to $24,000)	None

2. For first-time buyers: a longer runway

First-time buyers have their own rebates with a much longer window. The federal first-time home buyers’ rebate covers up to 100% of the 5% federal part, to a maximum of $50,000, on a new home up to $1 million, shrinking to nothing at $1.5 million. Ontario’s first-time buyer rebate covers up to $80,000 of the 8% provincial part. For homes bought from a builder, the agreement must be signed on or after March 20, 2025 and before 2031.

One important catch: you can’t double-dip. If you qualify for both the first-time buyer rebate and the enhanced rebate, the total relief on the 8% provincial part still can’t exceed $80,000. And if you qualify for the federal first-time buyer rebate, you must claim it first.

3. Everyone else: the regular Ontario rebate

Outside those programs, the long-standing Ontario new housing rebate still exists: up to $24,000 of the provincial part, regardless of the home’s price. It helps, but it’s a long way from $130,000.

The real math: one price, three scenarios

Let’s use a round, made-up number: a new home with a pre-tax price of $800,000. The full HST on that is $104,000 ($64,000 provincial plus $40,000 federal). Compare that to a resale home at the same price, where HST usually doesn’t apply at all.

Scenario	HST owing on the new home
Resale home, $800,000, bought from the owner	Usually $0
New home, principal residence, agreement signed April 1, 2026 to March 31, 2027	$0 (full $104,000 relieved)
New home, eligible first-time buyer, agreement signed before 2031	$0 (full $104,000 relieved)
New home, not a first-time buyer, agreement signed after March 31, 2027	About $80,000 ($104,000 minus the $24,000 Ontario rebate)

That last row is the one to stare at. Same house, same price, and a difference of roughly $80,000 depending on the date on your agreement and your buyer status. Taste still matters. But the calendar matters too.

What the rebates don’t cover

HST is the big one, but it isn’t the only difference between new and resale.

• Builder closing adjustments. New-build agreements often pass extra charges to the buyer at closing. Ask for a full list in writing, and ask whether there’s a cap, before you sign.
• How the price is quoted. Builders commonly quote prices with HST included and the rebates assigned to them. Ask exactly which rebates are already baked into the price, so you don’t count them twice.
• Warranty. New homes in Ontario come with 1-year, 2-year and 7-year warranties, covering things like bad workmanship, water penetration and major structural defects. Resale homes don’t, which is why a home inspection matters so much there.
• The builder. All new home builders and vendors in Ontario must be licensed by the Home Construction Regulatory Authority. Look them up before you fall in love with the model home.
• Land transfer tax. You pay it either way. Our closing costs guide walks through it.

Your move

• Before you shop: work out whether you count as a first-time buyer under the CRA’s definition. It’s not the same as “never owned.”
• Before you sign with a builder: have a real estate lawyer review the agreement, the HST clause and the closing adjustments.
• Before you compare prices: put the new build and the resale side by side on an after-tax, after-rebate basis, not sticker to sticker.

Quick questions

Do I pay HST on a resale home in Ottawa?

Usually not. The CRA says sales of used owner-occupied homes are usually exempt, because the seller isn’t a builder. There are exceptions, such as substantially renovated homes, so ask your lawyer if anything looks unusual.

Do I have to be a first-time buyer to get the 2026 relief?

No. The enhanced Ontario rebate and the affordability payment apply to eligible individuals buying a new home as a primary residence, with an agreement signed April 1, 2026 to March 31, 2027. First-time buyers have separate rebates with a longer window.

Does the builder get the rebate, or do I?

Either can happen. A builder can credit the rebate to you at closing; otherwise you apply to the CRA yourself, usually within two years. Ask the builder in writing which way your deal works.

Does this apply to investment properties?

The rebates in this article are for homes that will be your (or a relation’s) primary residence. Buying to rent is a different set of rules, so get tax advice before you sign.