If you build your own home or substantially renovate the one you live in, and construction starts between 1 April 2026 and 31 March 2027, Ontario's temporary HST relief can return up to $130,000, the full 13% HST, on a home worth up to $1.5 million (CRA Notice 346; Ontario Ministry of Finance). The catch is the test: a "substantial renovation" means at least 90% of the interior removed or replaced, and an ordinary addition doesn't count. This is the rule as of October 2026; the Canada Revenue Agency (CRA) decides each claim.
Key takeaways
- The Ontario Enhanced New Housing Rebate returns up to $80,000, the full 8% provincial part of the HST, for owner-built homes and substantial renovations where construction begins between 1 April 2026 and 31 March 2027 and is substantially completed before 2030 (CRA Notice 346).
- The Ontario New Home Affordability Payment adds up to $50,000, the federal 5% portion, for anyone who gets the enhanced rebate, so the two together reach $130,000 (Ontario).
- A renovation qualifies only if "at least 90% of the interior of the existing house" is removed or replaced, counting livable areas only (CRA; RC4028).
- A full second storey that at least doubles the living space can count when it comes with a renovation of the existing house, but a sunroom, family room or bedroom addition on its own doesn't (CRA).
- The home's fair market value when the work is substantially complete must be under $1,850,000, and full relief runs to $1.5 million (CRA Notice 346).
- The relief is a rebate of HST you actually paid, so on a renovation it's capped by the HST on your invoices, not by the $130,000 headline (CRA Notice 346).
What is Ontario's 2026 to 2027 HST relief?
It's two pieces that stack. The first is the Ontario Enhanced New Housing Rebate, administered by the CRA, which raises the old Ontario new housing rebate (capped at $24,000 regardless of value, per the CRA) to as much as $80,000. The second is the Ontario New Home Affordability Payment, paid by Ontario, which covers up to $50,000 of the federal 5% portion. Ontario's Ministry of Finance announced the package on 25 March 2026 and said the relief "would be available from April 1, 2026 to March 31, 2027" (media briefing).
You don't apply to Ontario separately. You claim on the CRA's owner-built forms, GST191 and RC7191-ON, and tick the consent that passes your claim to Ontario for the top-up (CRA Notice 346; Ontario).
The amount depends on what the home is worth when the work is substantially complete:
| Fair market value at substantial completion | Ontario enhanced rebate (8% part) | Ontario affordability payment (5% part) |
|---|---|---|
| Up to $1,000,000 | 100% of the 8% HST paid, up to $80,000 | Full relief, up to $50,000 |
| $1,000,000 to $1,500,000 | Flat $80,000 | Flat $50,000 |
| $1,500,000 to $1,850,000 | Partial rebate of the 8% paid | Partial relief |
| $1,850,000 or more | None | None |
Note: bands from CRA Notice 346 and Ontario's ONHAP page as of October 2026; both rebates are limited to the HST you actually paid, and the payment is reduced by any federal HST rebate you claim.
Does my renovation count as a "substantial renovation"?
Only if you gut it. The CRA's test is that "at least 90% of the interior of the existing house must be removed or replaced" (CRA). Notice 346 spells out what's left out of that 90%: the foundation, external walls, interior supporting walls, floors, roof and staircases (CRA Notice 346). Everything else inside, the partitions, drywall, kitchen, bathrooms, wiring, plumbing and mechanical, has to go or be replaced.
Only livable space counts. The CRA's guide says the test covers "the main floor living areas and finished basements and attics", and not garages or crawl spaces (RC4028). A new kitchen, two bathrooms and new floors is a big job, and it's nowhere near 90%.
Here's how common jobs line up against the CRA's wording:
| Project | Likely to qualify? | Why |
|---|---|---|
| Whole-house gut to the structure, new interior throughout | Yes, if at least 90% of the livable interior is removed or replaced | Meets the substantial renovation test |
| Full second storey on a bungalow, plus a renovation of the existing floor | Possibly | CRA lists "renovated ... your existing house and built ... a major addition", such as a second storey that at least doubles the living space |
| Rear addition (family room, bedroom, sunroom) only | No | "Adding a sun porch, sun room, family room, or bedroom by itself is not a major addition" |
| Kitchen and bathroom renovation | No | Far short of 90% of the interior |
| Basement apartment in an existing house | No, as a renovation | Not 90% of the house; look at the federal multigenerational credit instead |
| A house you build yourself on land you own | Yes, as owner-built | Owner-built homes are covered when construction begins in the window |
Note: our reading of the CRA rebate page and RC4028 as of October 2026; the CRA decides each claim on its facts, so ask it or a tax adviser before you count on the money.
Does a second-storey addition qualify?
Sometimes. The CRA's own example of a major addition is "a full second story to an existing bungalow", an addition "that at least doubles the living space", but its owner-builder list pairs that addition with a renovation of the existing house (CRA). RC4028 describes the result as work "so significant that the result is viewed as a newly built house" (RC4028).
So a 1,100 sq ft bungalow that gets an 1,100 sq ft second floor, with the main floor opened up and redone, is the shape of job the CRA has in mind. A 400 sq ft bedroom over the garage isn't. If you're close to the line, the drawings and the area calculations matter, and so does keeping them. Our second-storey cost guide covers what that size of job costs in Ontario in 2026.
What are the dates, and what if construction runs late?
Construction has to begin between 1 April 2026 and 31 March 2027, and the house has to be substantially completed before 2030 (CRA Notice 346). Substantially completed means "generally 90% or more", the point where someone could reasonably live there (RC4028). Notice 346 doesn't define the day construction "begins", so don't plan on a start date that depends on a technicality.
The tight date is the start. Before a gut renovation or a second storey can start, you need drawings and a building permit, and sometimes a minor variance from the Committee of Adjustment. The Ontario Building Code gives a town 10 business days to decide a permit for a house, but only once the application is complete (2024 Building Code Compendium). In Durham Region, Ontario, the City of Oshawa warns that, with record volumes, "we cannot guarantee review timeframes will be met" (Oshawa's permit page), and Pickering says its minor variance process takes about three months including the appeal period (Pickering's Committee of Adjustment page). If you're starting design in late 2026, that window is already short.
The CRA's general owner-built deadline is two years after the earlier of first occupancy or substantial completion (RC4028).
How much could I actually get back?
You get back HST you paid, so the size of the job sets the ceiling. Notice 346 says combined Ontario rebates "cannot exceed the lesser of $80,000 and the provincial part of the HST payable" (CRA Notice 346). On a renovation you pay HST on the contract and materials, not on land you already own.
Take a gut renovation billed at $500,000 before tax. The 8% provincial part is $40,000 and the 5% federal part is $25,000. If the house is worth under $1.5 million when it's done, the enhanced rebate could return the $40,000 and the affordability payment the $25,000, about $65,000 in all, less any federal rebate you also claim. That's our arithmetic from the published rules, not a CRA calculation.
Value matters in Durham. The CMHC average cost of a new single detached house in 2025 was $1,356,332 in Whitby and $1,199,432 in Clarington, per Durham Region's 2025 building activity review. A gutted and rebuilt house worth something like that would sit in the $1 million to $1.5 million band, where the relief is still the HST you paid, up to the caps. Fair market value is set when the work is substantially complete, so get an appraisal or a realtor's opinion on file if you're near $1.5 million.
Who is eligible, and what about the federal rebates?
You must be an individual building or substantially renovating for your own or a relation's primary place of residence (CRA Notice 346). The CRA says someone who renovates a house to live in "is generally not a builder of that house for GST/HST purposes" (RC4028).
Two federal rebates can sit alongside, and they reduce the Ontario payment. The first-time home buyers' rebate returns up to $50,000 of GST on new or substantially renovated homes up to $1 million, including owner-built homes where construction begins from 20 March 2025 and before 2031 (CRA). The older federal owner-built rebate applies only below $450,000 in value (CRA), so few GTA homes see it.
What paperwork should I keep?
Keep every original invoice in your name. The CRA says you must keep them for six years and won't accept photocopies, credit card slips or estimates instead (CRA). Ask your contractor for invoices that show the HST and their HST number, and keep the permit, the drawings and dated photos of the gutted interior. Those photos are the cheapest evidence you'll ever have that 90% came out.
Where we come in
We design and build second storeys, additions and whole-house renovations from our office in Ajax, and we draw the permit drawings in-house, so design and construction run on one schedule. That matters here, because the date construction begins is the gate. If you're weighing a gut renovation against a move, our renovate or move guide puts the two side by side, and our design-build page explains how we take a job from drawings to keys.
For a sense of scale and time, our Greenwood project added a rear extension and a new top storey to a house in east Toronto, roughly 40 km west of Whitby, and took ten months including design, permits and construction. We can't tell you whether your project qualifies for the rebate: that's the CRA's call, and worth a conversation with your accountant before you sign.
Questions
Does Ontario's 2026 HST relief apply to renovations?
Ontario's 2026 to 2027 HST relief applies to a substantial renovation, where at least 90% of the livable interior is removed or replaced, and construction begins between 1 April 2026 and 31 March 2027. Ordinary renovations, like a new kitchen and bathrooms, don't qualify.
How much is the Ontario HST rebate on a substantial renovation?
The Ontario Enhanced New Housing Rebate returns up to $80,000 of the 8% provincial HST, and the Ontario New Home Affordability Payment adds up to $50,000 of the 5% federal portion, for up to $130,000 in total. On a renovation the refund can't exceed the HST you actually paid on the work.
Does a second-storey addition qualify for the HST rebate in Ontario?
A full second storey that at least doubles the living space can qualify when it comes with a renovation of the existing house, according to the CRA. A smaller addition, or a family room, sunroom or bedroom added on its own, doesn't count as a major addition.
What is the deadline for the Ontario enhanced HST rebate for owner-built homes?
For owner-built homes and substantial renovations, construction must begin on or after 1 April 2026 and on or before 31 March 2027, and the home must be substantially completed before 2030. The CRA's general deadline to file an owner-built claim is two years after the earlier of first occupancy or substantial completion.
Is there a home value limit on Ontario's HST relief?
Yes. Full relief applies to homes worth up to $1.5 million at substantial completion, a partial rebate applies between $1.5 million and $1.85 million, and homes worth $1.85 million or more get none of the enhanced relief.
Do I apply to Ontario or the CRA for the new home affordability payment?
You claim through the CRA on the owner-built rebate forms, GST191 and RC7191-ON, and consent to share the claim with Ontario. Ontario says no separate application is needed for the affordability payment.
Sources
- CRA Notice 346 canada.ca
- Ontario Ministry of Finance ontario.ca
- CRA canada.ca
- RC4028 canada.ca
- media briefing news.ontario.ca
- 2024 Building Code Compendium publications.gov.on.ca
- Oshawa's permit page oshawa.ca
- Pickering's Committee of Adjustment page pickering.ca
- Durham Region's 2025 building activity review media-003-ca.cdn.govstack.com
- CRA canada.ca