Understanding how HST (Harmonized Sales Tax) applies to home renovations in Ontario is essential for accurate budgeting — and for knowing when you may be eligible for substantial rebates. At 13% HST, the tax on a $100,000 renovation is $13,000. That is a significant amount that catches many Ottawa homeowners off guard when the final invoice arrives. This 2026 guide explains exactly how HST applies to residential renovations in Ontario, when you can claim the new housing HST rebate for substantial renovations, the difference between labour and materials taxation, and practical strategies for ma...
The basic rules are straightforward, but several nuances affect what you actually pay.
In Ontario, HST at 13% (5% federal GST + 8% provincial PST) applies to virtually all renovation services and materials. This includes contractor labour, building materials purchased from suppliers, architectural and engineering fees, permit fees charged by private organizations, equipment rentals, a...
City of Ottawa building permit fees are not subject to HST (government fees are exempt). If you buy materials yourself and do the labour, you pay HST on the materials but not on your own labour (obviously). Used building materials sold by private individuals (not businesses) are generally not subjec...
The most significant tax opportunity for Ottawa homeowners doing major renovations.
The Canada Revenue Agency defines a substantial renovation as one where all or substantially all (90% or more) of the interior of a home is removed or replaced. The renovation must be so extensive that the result is essentially a new home within the existing structure. Qualifying criteria include: 9...
Federal GST rebate: 36% of the GST paid (5% component of HST), to a maximum of $6,300. This rebate starts to phase out when the fair market value of the renovated home exceeds $350,000 and is fully eliminated at $450,000. Since most Ottawa homes are valued well above $450,000, the federal rebate is ...
Legal strategies to minimize the tax impact of your renovation.
Claim the substantial renovation rebate if your project qualifies (consult an accountant to verify). If you work from home, a portion of renovation costs for your home office may be deductible as business expenses. Rental property renovations — HST paid on renovations to a rental property can be cla...
Yes. HST at 13% applies to virtually all renovation services and materials in Ontario. A $50,000 renovation will have $6,500 in HST added. Always confirm whether your contractor's quote includes or excludes HST.
If your renovation qualifies as a substantial renovation (90%+ of interior removed or replaced), you can claim the GST/HST New Housing Rebate. The Ontario portion can be worth up to $24,000. Most partial renovations do not qualify for the rebate.
CRA defines substantial renovation as removing or replacing 90% or more of the existing interior (excluding foundation, exterior walls, and roof). The result must be essentially a new home within the existing structure. Consult a tax professional to determine if your project qualifies.
The Ontario portion of the new housing rebate is 75% of the provincial PST paid (8% component), up to $24,000. There is no phase-out based on home value. For a $200,000 renovation, the Ontario rebate could be up to $12,000.
No. City of Ottawa building permit fees are government fees and are exempt from HST. However, if you hire a permit expediting service (private company), their fees would be subject to HST.