⚡ TLDR: The federal government expanded the HST rebate for new homes — but the fine print disqualifies most custom home buyers. This rebate primarily benefits first-time home buyers. If you've owned property before, you're out. If your home costs more than $1.5M, you're out. If you're building as an investment or through a corporation, you're out. Here's what it actually means, who qualifies, and what everyone else can still access.
Why We're Writing This
Every week, clients come to us having read headlines about the "expanded HST rebate" and assume they're in line for a major windfall.
We'd rather give you the honest picture upfront than let you plan around savings that won't materialize.
This rebate primarily benefits first-time home buyers — not typical custom home clients.
That's a hard truth, but it's the right one to lead with.
What the Government Actually Announced
In early 2025, the federal government eliminated the GST on newly constructed homes — a meaningful shift from the existing partial rebate structure.
The program applies to purchase agreements signed between March 20, 2025 and December 31, 2031, with construction completed before 2036.
The confirmed federal savings: up to $50,000 on eligible homes.
Ontario has proposed a matching provincial rebate that could add approximately $80,000 in additional savings — but as of this writing, Ontario's portion has not been finalized into law. We won't count it until it's confirmed.
Who Actually Qualifies
Here's where most people lose the thread. To qualify for the new rebate:
✅ You must be a first-time home buyer
✅ The home must be your primary residence
✅ Your purchase agreement must be signed after March 20, 2025
✅ Construction must be completed before 2036
Automatically disqualified:
❌ Anyone who has owned a principal residence before (lifetime claim — one shot, ever)
❌ Corporations
❌ Investors or those building for rental purposes
❌ Spec builders
The lifetime claim limit is the big one for our audience. Most custom home clients have owned property before. That single rule removes the majority of BVM clients from eligibility immediately.
The Honest Numbers: How the Rebate Phases Out
Not all home values qualify equally.
A $1.8M custom home? $0 from this program. Full stop.
This isn't a loophole or an edge case — it's the structure of the program. The majority of custom home builds in the Toronto market exceed $1.5M and don't qualify on price alone.
The Lifetime Claim Rule: The Disqualifier Most People Miss
This is the detail that changes everything for our typical client.
You can only ever claim the first-time buyer HST rebate once in your lifetime.
If you owned a home at any point before this build — a starter home, a condo, a previous family home — you do not qualify. It doesn't matter how long ago it was. There are no exceptions.
For a family upgrading from their first home to a custom build, this is likely the end of the conversation on this rebate.
Can Owner-Built Custom Homes Qualify?
Yes — but only under very specific conditions.
If you are hiring a builder (like BVM Contracting) to construct a home on land you own, you may qualify only if:
1. You are a first-time buyer
2. It will be your primary residence
3. Your purchase agreement was signed after March 20, 2025
4. The project is completed before 2036
5. The total home value is under $1.5M
All five conditions must be met simultaneously. Miss one, and the rebate disappears.
What Everyone Else Can Still Access
Not qualifying for the new rebate doesn't mean you walk away empty-handed.
The existing Ontario new home rebate (up to approximately $24,000) remains available to a broader group of buyers — including those who don't qualify as first-time buyers under the new federal program.
Even if you don't qualify for the expanded rebate, you may still qualify for the existing Ontario rebate. It's worth having your accountant confirm eligibility before you assume you're getting nothing.
Why We're Telling You This
A lot of contractors will let clients believe they're getting savings they're not. We'd rather lose a deal than let you build a financial plan on false assumptions.
Our job is to help you build the right home at the right number. That means being straight about what programs actually apply to your situation — and which ones don't.
If you think you might qualify, here's what to do:
→ Confirm first-time buyer status with a real estate lawyer
→ Confirm home value projection stays under $1.5M
→ Verify your purchase agreement date falls after March 20, 2025
→ Have your accountant review the full eligibility criteria before budgeting for the rebate
Frequently Asked Questions
Does the rebate apply to renovations or additions?
No. This rebate applies only to newly constructed homes — not renovations, additions, or major retrofits.
What if Ontario passes its proposed rebate?
If Ontario finalizes its matching rebate, eligible buyers could see combined savings of up to approximately $130,000. We'll update our clients when that becomes law. Until then, only the $50,000 federal portion is confirmed.
Does building through a corporation disqualify me?
Yes. The rebate applies to individual buyers only. Corporate builds are ineligible regardless of other factors.
Can I qualify if I previously owned a rental property but not a principal residence?
This is a nuanced area that depends on your specific history. Speak with a tax professional — the rules around first-time buyer status can be complex.
Key Takeaways
→ The new federal HST rebate offers up to $50,000 in confirmed savings — but only for first-time buyers building primary residences
→ Ontario's proposed ~$80,000 matching rebate is not yet law — don't plan around it
→ Homes above $1.5M receive $0 from this program
→ The lifetime claim rule disqualifies most clients who have owned property before
→ Corporations, investors, and spec builds are automatically ineligible
→ The existing Ontario rebate (up to ~$24,000) may still be available even if you don't qualify for the new program
→ Always confirm with a real estate lawyer and accountant before adjusting your budget
BVM Contracting builds custom homes across Toronto and the GTA. Our team handles the full process — design, permits, construction, and project management — so you can focus on the big picture. Book a consultation to talk through your project.