CRA assessing you to repay a housing rebate?
You generally have 90 days from the date of the notice of assessment to object. Gather proof of where you lived after closing, such as utility bills, ID changes, insurance and mail.
The Rebates Available on New Homes in Ontario
New homes in Ontario are subject to 13% HST. Several rebates can reduce that cost. The federal GST/HST new housing rebate refunds 36% of the 5% GST up to $6,300, for homes priced under $350,000, and phases out between $350,000 and $450,000. The Ontario new housing rebate refunds 75% of the 8% provincial portion up to $24,000, and unlike the federal rebate is not eliminated for higher-priced homes.
A federal First-Time Home Buyers' GST rebate became law in March 2026. It can refund the full 5% GST, up to $50,000, on new homes valued up to $1 million, phasing out between $1 million and $1.5 million, for eligible first-time buyers under qualifying agreements of purchase and sale. Investors who buy new homes to rent out long-term may instead qualify for the new residential rental property (NRRP) rebate, which has its own conditions.
Why Rebates Are Denied or Reversed
The owner-occupied rebates generally require that, when you sign the agreement, you intend the home to be the primary place of residence of you or a qualifying relative, and that someone in that group actually occupies it first after construction. Builders often credit the rebate at closing and the buyer assigns it to them, which means many buyers do not realize they are exposed until the CRA reviews the claim later.
- The buyer did not move in, or moved in only briefly before selling or renting
- A co-purchaser on title (such as a parent helping with financing) did not intend to live in the home
- The home was assigned or flipped before closing
- The buyer was found to have bought for investment rather than to live in
- The rental rebate application was filed late or the lease did not meet the one-year requirement
- Price thresholds or first-time buyer conditions were not met
Proving Your Primary Place of Residence
Intention is judged by evidence. The CRA and the Tax Court look at what you did, not just what you say: whether you moved your belongings, changed your driver's licence and mailing address, set up utilities and home insurance in your name, and how long you lived there. Life changes such as job relocation, family breakdown or illness after signing can be relevant to explain why occupancy did not occur as planned.
Parents who co-sign to help a child qualify for a mortgage present a common trap. If every purchaser on title does not meet the requirements, the rebate can be denied entirely. The Tax Court has decided cases both ways, depending on the documents and evidence of the family arrangement.
Deadlines
Most new housing rebate applications filed directly with the CRA must be made within two years after ownership is transferred. The NRRP rebate has its own two-year deadline that runs from different dates, and late filing generally cannot be cured. If you missed a deadline, speak with us promptly, as some situations still have options.
Assignment Sales and the Rebate
Buyers who assign their purchase agreement for a new home before closing generally do not qualify for the owner-occupied rebates, because they never take ownership and occupy the home. The assignment itself may also attract HST and income tax. If you are considering an assignment, get advice on the tax consequences before you sign.
How We Handle Your Matter
- 1
Review your purchase
We review your agreement, title, closing documents and the rebate forms that were filed.
- 2
Identify the right rebate
We determine which rebates you qualify for: federal, Ontario, first-time buyer or rental.
- 3
Assemble occupancy evidence
We gather documents and statements that prove your intention and occupancy.
- 4
Respond or object
We respond to CRA reviews or file a Notice of Objection to a rebate assessment.
- 5
Appeal
If needed, we take your case to the Tax Court of Canada.
Frequently Asked Questions
How much is the GST/HST new housing rebate in Ontario?
The federal rebate is up to $6,300 for homes under $350,000, phasing out by $450,000. The Ontario rebate is up to $24,000 regardless of price. Eligible first-time buyers may instead receive up to $50,000 under the federal First-Time Home Buyers' GST rebate.
My builder credited the rebate. Why is the CRA asking me to repay it?
When you assign the rebate to the builder, you still must meet the eligibility conditions. If the CRA later concludes you did not, it assesses you, not the builder, for the rebate amount.
My parents are on title with me. Does that affect the rebate?
It can. Generally each purchaser must meet the primary residence requirements, or be a qualifying relative of someone who does. Co-ownership arrangements should be reviewed before closing.
I bought a new condo to rent out. Can I get a rebate?
Possibly, through the new residential rental property rebate, if the unit is rented under a lease of at least one year as a primary residence and you apply within the deadline.
Can I claim the rebate if I bought a new home with a family member?
Generally, each purchaser must meet the requirements, or be a qualifying relative of someone who does. Arrangements in which a relative co-signs only for financing purposes have led to denials, so review the arrangement before closing.
Is the first-time home buyers' GST rebate available for resale homes?
No. It applies to new or substantially renovated homes purchased from a builder, owner-built homes and certain co-op shares. Resale homes are generally exempt from GST/HST to begin with.
Speak With a Tax Lawyer Before You Respond to the CRA
Tax deadlines are strict and what you say to the CRA can be used in an assessment. A confidential consultation helps you understand your options before you act.
This page provides general information about Canadian tax law as of October 2026. It is not legal advice, and reading it does not create a lawyer-client relationship. Tax rules change and every situation is different, so please speak with a lawyer about your circumstances.