Tax Incentives & Rebates for Custom Home Builds in Toronto — 2026 Guide

HST New Housing Rebate

If you build a custom home as your primary residence, you are eligible for the GST/HST New Housing Rebate. In Ontario, this has two components:

Federal portion: A rebate of 36% of the federal GST paid, up to a maximum of $6,300. The full rebate applies to homes with a fair market value up to $350,000, with a sliding scale that phases out completely at $450,000. For most Toronto custom builds (which exceed these thresholds), the federal portion is effectively zero.

Ontario provincial portion: A rebate of 75% of the provincial HST paid, up to a maximum of $24,000. This applies regardless of the home's value — there is no phase-out for higher-priced homes. For a Toronto custom build, this is the meaningful component.

Apply after construction is complete through the Canada Revenue Agency. You must occupy the home as your primary residence (or have a qualifying family member do so) to claim the rebate.

Proposed 2026 Changes: Bill C-4

The federal government's Bill C-4 (Making Life More Affordable for Canadians Act), which received Royal Assent in March 2026, proposes significant tax relief for first-time homebuyers building new homes:

• Full removal of GST on newly built homes valued up to $1 million for qualifying first-time buyers
• Sliding relief for homes valued up to $1.5 million
• Combined federal and provincial savings potentially reaching $80,000–$130,000

CMHC Eco Plus (Green Building Incentive)

The Canada Greener Homes Grant and Loan programs closed to new applicants in late 2025. However, new construction is incentivized through mortgage insurance. The CMHC Eco Plus program offers a 25% refund on your mortgage loan insurance premium if your custom build meets specific energy efficiency targets — typically 20% or more above the baseline for new homes under the EnerGuide system, or a recognized certification such as LEED or Built Green.

For a custom build requiring CMHC-insured financing, this translates into meaningful savings on your mortgage insurance cost. Confirm the current qualification criteria with your lender or mortgage broker.

Ontario Home Renovation Savings Program

While this program primarily targets renovations, custom builds that incorporate qualifying green technologies may be eligible for post-construction rebates. The Home Renovation Savings Program, delivered through Enbridge Gas and Save on Energy, offers:

Eligibility depends on whether the specific technology qualifies under the program's rules for new construction versus retrofit. Confirm current requirements at saveonenergy.ca or homerenovationsavings.ca before finalizing your specifications.

Multigenerational Home Renovation Tax Credit (MHRTC)

If your custom home includes a self-contained secondary suite (with kitchen, bathroom, and private entrance) for a senior aged 65+ or an adult eligible for the Disability Tax Credit, you can claim 15% of up to $50,000 in qualifying construction costs — a refundable tax credit worth up to $7,500. This applies to new builds that incorporate a qualifying suite, not just renovations. Details from the CRA.

Home Accessibility Tax Credit (HATC)

For custom homes designed to accommodate seniors (65+) or individuals eligible for the Disability Tax Credit, this non-refundable credit covers up to $20,000 per year in qualifying modifications — wheelchair-accessible entries, walk-in showers, grab bars, and similar features. Incorporating these elements during initial construction is far more cost-effective than retrofitting later. Details from the CRA.

Capturing Incentives During Your Build

The most effective approach is to identify every eligible program during the design phase — before specifications are locked. Energy system choices (heat pump type, insulation levels, window ratings), suite design, and accessibility features all affect what you qualify for. Our team flags rebate-eligible specifications during the planning process so your financial model reflects the true net cost.

Learn more about our custom home building services.