New Housing RebateHOUSING REBATE Buyers of new housing would be eligible for new housing rebates. The annual benefit of the new housing rebate is estimated to be $1.1 billion. Currently, the RST applies to building supplies used in the construction of new homes. The single sales tax would remove this embedded tax. Based on a recent Canada Mortgage and Housing Corporation study, this embedded sales tax ranges from about two per cent to three per cent, on average, on the final sale of a new house in Ontario. To ensure that, on average, new homes under $400,000 would not be subject to an additional tax burden, the government is proposing a new housing rebate. Homebuyers would be able to claim a rebate of part of the provincial portion of the tax for new homes priced up to $500,000. The rebate for new primary residences under $400,000 would be 75 per cent of the provincial portion of the tax (or six per cent of the purchase price), with the rebate amount reduced for homes priced between $400,000 and $500,000. Resale homes would not be subject to the single sales tax. Source: Ontario Budget 2009: Chapter III: Reforming Ontario's Tax and Pension Systems | 
