Understanding the HST New Housing Rebate & NRRP Rebate: What Buyers & Investors Need to Know

When buying a newly built home or condo in Ontario, it’s important to understand how the Harmonized Sales Tax (HST) and rebates work. Depending on your intentions for the property—whether you're moving in or renting it out—you may qualify for one of two different rebate programs: the HST New Housing Rebate or the New Residential Rental Property (NRRP) Rebate.

Here’s a breakdown of both, including who qualifies, how much you can get back, and what to watch out for.

🏠 HST New Housing Rebate (For End-Users)

The HST New Housing Rebate is available to buyers who intend to live in the home themselves or have a close family member live there as their primary residence.

✅ Who Qualifies?

• You bought a new or substantially renovated home from a builder.

• You or an immediate family member will live in the home as a primary place of residence.

• The property is located in Canada (Ontario in this case).

💵 How Much Can You Get?

• Federal portion (5% GST): Up to $6,300 (phases out between $350,000 and $450,000; no rebate above $450,000).

• Ontario portion (8% PST): Up to $24,000, with no phase-out.

💡 Example:

If you buy a $600,000 new condo in Ontario:

HST (13%)	$78,000
Federal Rebate	$0 (since it's over $450K)
Ontario Rebate	$24,000
Total Rebate	$24,000

✅ If the buyer moves in themselves, this rebate is usually applied at closing by the builder.

❌ If the buyer rents it out instead, this rebate could be revoked, and the buyer would have to repay the rebate and then apply for the NRRP rebate.

📌 Tip:

The rebate is often applied directly at closing by the builder, so you’ll see a lower purchase price. But beware — if you rent out the property instead of moving in, CRA can claw back the rebate.

🏢 NRRP Rebate (For Investors & Landlords)

If you purchase a newly built property to rent it out, you won’t qualify for the New Housing Rebate. But don’t worry — there’s an alternative: the New Residential Rental Property (NRRP) Rebate.

✅ Who Qualifies?

• You bought a new or substantially renovated home from a builder.

• The home is intended for long-term rental (1-year lease or longer).

• You do not move in yourself.

• You apply within 2 years of closing.

  
  

💵 How Much Can You Get?

• Same amount as the New Housing Rebate:

  • Up to $6,300 (Federal portion)

  • Up to $24,000 (Ontario portion)

• However, the federal portion is not available if the home price exceeds $450,000.

🗂️ Important Conditions:

To qualify, the unit must:

• Be a newly built or substantially renovated property

• Be rented out for at least 1 year on a lease

• Be claimed within 2 years of the closing date

📌 Important:

The NRRP rebate is not applied automatically — you must pay the full HST upfront and then apply directly to the CRA for the rebate after closing.

📊 Example

Imagine you buy a $600,000 new condo in Ontario:

• If you live in it: You get up to $24,000 Ontario rebate at closing. No federal rebate since it's over $450K.

• If you rent it out: You pay full HST at closing, then apply for the NRRP rebate and get back up to $24,000 (Ontario only).

Purchase Price	Total HST	Approx. NRRP Rebate
$350,000	$45,500	~$30,300
$500,000	$65,000	~$24,000 (Ontario only)
$700,000	$91,000	~$24,000 (Ontario only)

👉 For units over $450,000, only the Ontario rebate applies, not the federal portion.

⚠️ Common Mistakes to Avoid

• Renting out the property during the occupancy period (before final closing) can disqualify you from the New Housing Rebate.

• Failing to apply for the NRRP rebate within 2 years of closing = no rebate.

• Assuming short-term rentals (e.g. Airbnb) qualify — they don’t.

  
  

💬 Final Thoughts

Whether you're buying a home for yourself or investing in a rental property, understanding which rebate you qualify for can save you thousands of dollars. It’s a good idea to speak with your real estate agent or accountant to make sure your rebate is handled properly.

If you're planning a purchase and have questions about which rebate applies to your situation — let’s connect! I’d be happy to guide you through it.

	New Housing Rebate	NRRP Rebate
Purpose	For buyers intending to live in the unit	For investors intending to rent out the unit
When available	At final closing	After closing and proof of rental lease
How to claim	Often credited directly at closing	Must apply directly to CRA within 2 years of closing
Who applies	Usually the builder	Purchaser must apply personally (or with accountant/lawyer)