The New Regulatory Framework for the Ontario Enhanced HST Rebate

What Buyers and Builders Need to Know About the Ontario ENHR

By David Young

As discussed in our previous updates spanning back to the March budget announcement^{[1] [2]  [3]}, the temporary expansion of the HST New Housing Rebate has been navigating a complex legislative and administrative pipeline. That period of frustrating uncertainty is officially over as of June 22, 2026.

With the federal government passing Bill C-26^[4], the Improving Housing Supply Act, the introduction of the Order in Council P.C. 2026-610 (Regulations Amending the New Harmonized Value-Added Tax System Regulations, No. 2)^[5] and the provincial filing of Ontario Regulation 196/26 under the Retail Sales Tax Act,^[6] the statutory framework is now in place. Following these enactments, the Canada Revenue Agency (CRA) released Notice 346^[7], outlining the operational mechanics for what is now officially named the Ontario Enhanced New Housing Rebate (Ontario ENHR).

The "Sticker Purchase Price": Flow of Funds and the 30-Day Service Standard

In the Ontario pre-construction market, most end-user purchasers rely on builders to credit HST rebates directly against the purchase price on the Final Statement of Adjustments to lower their effective purchase price and reduce overall mortgage financing requirements. The CRA has confirmed that builders can continue to accept assignments of both the 8% provincial portion (the Ontario ENHR) and the additional 5% top-up at the closing table.

Administratively, the reimbursement flow to the builder will split into two distinct electronic channels:

• The 8% Provincial Rebate: Builders will apply through the standard CRA portal using Form GST190. Once eligibility is confirmed, the CRA will reduce the builder’s HST liability directly on their standard GST/HST return. The CRA is updating this form shortly, but no structural changes are expected for the associated Schedule RC7190-ON. It is expected to be released by Mid-July 2026;
  
  
• The 5% Federal Top-Up): Because the 5% portion is funded federally, the CRA portal now includes a mandatory section requiring the builder applicant to provide explicit consent for the CRA to share their banking and rebate information directly with the Ontario Ministry of Finance. This means the builder will have to pay this 5% up front and then be refunded by the Ontario Ministry of Finance directly.
  
  The CRA will provide Ontario with a monthly list of these approved claims. Crucially, the Ministry of Finance has committed to a 30-day service standard for issuing electronic payments directly back to the builder. The wait time will be longer for paper cheques.

The Financial Breakdown

Governed by O. Reg. 196/26, the maximum combined tax relief package stands at a substantial $130,000, as below:

• Homes Under $1 Million: Full 100% rebate of the 8% provincial HST, plus the 5% federal equivalent top-up, to a maximum of $130,000.
• Homes Between $1 Million and $1.5 Million: The $130,000 maximum rebate will be maintained (meaning not all of the 13% HST will be rebated);
• Homes Between $1,500,001 and $1,850,000: A partial rebate for the provincial portion, scaling downward proportionally as the price climbs; and
• Homes $1,850,000 and Above: These properties do not qualify for the enhanced expansion but remain eligible for the standard $24,000 "Legacy" Ontario New Housing Rebate.

To qualify for the Ontario ENHR:

• The Agreement of Purchase and Sale (APS) must have been executed between April 1, 2026, and March 31, 2027;
• Construction of the home must begin on or before December 31, 2028;
• Construction must be substantially completed on or before December 31, 2031; and
• ●The newly built home must be used as a primary place of residence.

Applying for the Rebates: Who Pays and Who Applies

While assigning the rebate to the builder remains the most efficient path, purchasers retain the right to apply directly themselves to the CRA post-closing. For example:

• If you sign an APS after April 1, 2026, and it does NOT have a clause covering these Ontario ENHR: You will need to pay the full amount on closing and apply for the funds back post-closing from the CRA,You may apply through your MyCRA account online or via a paper application. The CRA is recommending the online method, as they aim to have much faster response times;
  
  
• If you sign an APS after April 1, 2026, AND there is a clause stating that the builder will handle the Ontario ENHR on your behalf: You will receive the benefit of the rebates directly on closing with a reduced balance owing on the Final Statement of Adjustments. In this scenario, you do not need to apply, deal with the CRA, or wait months for funds to be refunded to you;

Investors and the Enhanced New Residential Rental Property Rebate (NRRPR)

For real estate investors, the Enhanced New Residential Rental Property Rebate (NRRPR) will be administered in the exact same manner as the legacy Rental Rebate before the Enhanced NRRPR announcement.

Eligible new rental housing will qualify for the updated rebate of up to $130,000, provided the purchase strictly adheres to the pre-existing criteria under the NRRPR framework. Unlike primary residences where builders may credit the amount, investors must pay the full amount of HST on closing and then apply for the funds back directly from the CRA post-closing.

If you have any questions about calculating your rebate, the changes or existing rules of HST on pre-construction properties, please reach out to David Young at 365-509-2029 Ext.106 or dyoung@sorbaralaw.com