Recent Sales Tax Changes in Ontario and British Columbia: HST Relief and PST Expansion 

Ontario and British Columbia have announced important sales tax changes that may affect homebuyers, landlords, businesses, vendors, and purchasers of certain professional services. In Ontario, temporary HST relief is being introduced for eligible new homes and new rental properties. In British Columbia, the PST will expand to several professional services starting October 1, 2026. 

Ontario temporary HST relief for new homes and rental properties 

On May 5, 2026, Ontario has introduced Bill 114, HST Relief Implementation Act (Residential Property Rebates) 2026, to support the implementation of the temporary HST relief on new homes as previously announced in its last budget tabled on March 26, 2026. 

In this budget, it was announced that the HST would be temporarily relieved on new or substantially renovated homes valued up to $1M and temporarily reduced on new homes between $1M and $1.85M. 

The 13% HST consists of a 5% federal portion and an 8% provincial portion. Bill 114 is amending Ontario’s Retail Sales Tax Act to provide relief in the form of a provincial payment (top-up program up to $50K)) equivalent to the 5% of the federal portion of the HST on a new home valued up to $1M.   

The relief in respect of the 8% provincial portion of the HST will be provided through the enhancement of Ontario’s existing New Housing Rebate (NHR) and New Residential Rental Property Rebate (NRRPR) which will need to be implemented by way of HST regulations made under the federal Excise Tax Act.  

Buyers of eligible new homes and landlords of eligible new rental properties could benefit from an HST relief up to a maximum of $130,000 on their homes and rental units valued up to $1.5M. This HST relief would then gradually decrease to a maximum of $24,000 for homes and rental units valued at $1.85M or more. 

For new eligible homes purchased from a builder, the HST relief would generally apply when  

• the agreement of purchase and sale for the home was entered into between the individual and the builder on or after April 1, 2026, and on or before March 31, 2027; and 
• the construction or substantial renovation of the home 
  • begins on or before December 31, 2028, and 
  • is substantially completed on or before December 31, 2031. 

Where the person is a landlord, the HST relief would apply differently for eligible rental units depending on whether the construction or substantial renovation of the residential complex begins on or before March 31, 2026, or on or after April 1, 2026. Eligibility may differ depending on whether you purchase or build the rental units, and the type of residential complex. In all cases, the construction or substantial renovation of the residential complex must be substantially completed (at least 90% completion) on or before December 31, 2029. 

Ontario has asked the federal government to administer the full HST relief program through the Canada Revenue Agency. This would include not only the enhanced Ontario’s NHR and NRRPR for the 8% portion of the HST but also the provincial relief related to the 5% portion of the HST.  

Please note that the applications for HST relief are not open at this time and will only be available after the federal regulations and provincial laws are being implemented and application forms are being released. This means that, for now, eligible purchasers of an eligible home would need to pay the HST at closing but would be eligible to apply for the HST relief later.  

In its May 5, 2026 updated backgrounder, Ontario has indicated that once the required federal regulations are in place, the builders would be able to pay or credit the enhanced Ontario NHR for homes to purchasers but not the enhanced Ontario NRRPR. Bill 114 also includes provisions that will enable buyers to assign the HST relief related to the 5% portion of the HST to builders who would then be able to credit this amount to the purchaser.  

More information and details on the eligibility of this HST relief will be available when the federal and provincial legislative changes will be implemented. Further details are also expected to understand how the administration of this relief will be managed. 

What This Means for Buyers, Builders and Landlords 

Eligible purchasers may eventually benefit from significant HST relief, but applications are not yet open. Until the required federal regulations, provincial laws, and application forms are implemented, eligible purchasers may need to pay the HST at closing and apply for relief later. Builders may also be able to credit certain amounts to purchasers once the required rules are in place. 

British Columbia PST Expansion to Professional Services 

The province has announced in its 2026 Budget that several previously exempt professional services will be subject to the provincial sales tax (“PST”) at the rate of 7% starting October 1, 2026. These services are:  

1. Accounting services, including bookkeeping and assurance services; 
2. Architectural services; 
3. Engineering and geoscience services; 
4. Security services, including private investigation services; and 
5. Non-residential real estate services, including trading services, rental property management services and strata management services. 

In respect of the architectural, engineering and geoscience services, the PST will only apply to 30% of the purchase price of those services. In other words, they will be taxed at an effective rate of 2.1%. 

The province has issued several bulletins providing more details about how PST will apply to each type of service. 

Vendors and purchasers of these services should review carefully these PST changes and determine how it may impact their operations. Depending on their specific situation, vendors may be required to register, collect and remit PST and purchasers may be required to self-assess and remit the PST to the British Columbia tax authorities.  

Richter can guide you in respect of the above provincial sales tax changes. We invite you to reach out to your Richter partner mentioned below. 

What This Means for Vendors and Purchasers 

Businesses providing affected professional services in British Columbia should review whether they need to register, collect, and remit PST. Purchasers of these services should also assess whether they may be required to self-assess and remit PST. 

Key Takeaways