At closing, the rebate came off the price. The statement of adjustments showed it, your lawyer confirmed it, and the amount you had to find was lower than you’d feared.
It feels finished. It usually is.
But a credit at closing is not the same as a rebate you’ve been granted, and the difference only becomes visible when something goes wrong — at which point the money has been spent and the house has been lived in for a year.
What the credit actually is
When a builder credits a rebate at closing, they aren’t giving you a discount. You assign the rebate to them, and they advance you its value. They then claim it from the CRA themselves.
The CRA’s own example runs like this: a buyer purchases a $1 million home and is charged $130,000 in HST. The buyer assigns the $80,000 rebate and the $50,000 Ontario top-up to the builder. The builder credits both at closing, and the buyer pays that much less.
Two things follow from that structure, and neither is obvious at the table.
The eligibility is still yours. The builder advanced the money on the basis that you qualify. The CRA holds you responsible for ensuring you actually do.
And the assignment doesn’t transfer the risk. If it turns out you weren’t entitled, the amount has to go back — and the CRA is explicit that the person who repays it is you. The credit came off your purchase price; the liability stays with you.
There is one situation where your builder shares it. Where the builder knew, or ought to have known, that you weren’t entitled, the two of you can be jointly and severally liable. That’s a meaningful protection where a sales office pushed a rebate they had reason to doubt.
But it’s the exception, not the rule. The default position is that the buyer repays.
Why someone turns out not to qualify
This is the part worth reading closely, because none of these are exotic. They’re the ordinary ways a claim that looked fine at closing doesn’t survive a review.
The four-year ownership test. The first-time buyer programs count a home owned by you or your spouse, lived in as a primary residence, in the current calendar year or the four before it. People sign the declaration confident they qualify, on a test they haven’t actually applied. A spouse’s condo from four years ago, before the two of them met, is enough.
It wasn’t your primary residence. A property bought for a child, or intended as a home and then rented out instead, doesn’t meet the homeowner test. The intention at closing is what matters, but a change shortly afterwards invites questions about what the intention really was.
You weren’t the first to occupy it. If anyone lived there before you — including a tenant, even briefly — the homeowner rebate generally isn’t available.
The value sat near a threshold. Above $1.85 million the enhanced relief falls away to $24,000. Between $1.5 million and $1.85 million it declines across the range. A purchase price that moved after the agreement, or a value the CRA assesses differently, can change the entitlement.
The agreement date didn’t do what everyone assumed. Covered below, and it’s the one people find hardest to accept.
Amending an old agreement doesn’t create eligibility
Varying, altering or assigning an earlier agreement doesn’t move it into that window. Where an agreement was entered into before April 1, 2026 and is later changed in a way that would otherwise make it look like a new agreement, it is deemed to have been entered into before April 1, 2026 regardless. The rebate doesn’t become available.
Assignment purchases have a bright line. For enhanced rebate eligibility, both the original agreement of purchase and sale and the assignment agreement must have been entered into inside the window. If the original agreement pre-dates April 1, 2026, an assignment cannot rescue it — however the assignment itself is dated.
Terminating and replacing an agreement is more nuanced. A pre-April-1 agreement that is terminated, with a new agreement entered into afterwards, isn’t automatically disqualified. But an anti-avoidance rule applies: where the relationships between the parties meet the conditions, and the new arrangement can’t reasonably be regarded as having been undertaken primarily for bona fide purposes other than obtaining the rebate, the new agreement is deemed to be a pre-April-1 agreement too.
In practical terms: if the reason for the new agreement was the rebate, expect it to be treated as the old agreement. If there was a genuine commercial reason and the rebate was incidental, that’s a different conversation — and one to have before signing rather than after.
The arithmetic is tempting. A buyer with a 2025 agreement looks at a $130,000 program they’ve just missed, and restructuring looks like the obvious fix. Sometimes a sales office will suggest it.
If the restructuring doesn’t achieve eligibility and the rebate is credited anyway, that’s exactly the situation this post is about.
When it surfaces
Not at closing. That’s the difficulty.
A rebate credited at closing is claimed by the builder afterwards, and any review happens after that. By the time a question is asked, you’ve moved in, spent the money, and stopped thinking about it.
The CRA may not catch the omission or error for years. The buyer is liable for the outstanding amount of the rebate plus any interest incurred.
What makes it painful isn’t only the amount. It’s that the money was never sitting in an account waiting — it went into the purchase. A repayment demand arrives as a new liability rather than a reversal.
What to do before you sign
Read the rebate clause, and ask who carries the risk. Specifically: does the builder require you to assign the rebate? Will they credit it at closing? And are you required to reimburse them if the CRA reduces or denies it? That last question is the one that matters and it’s the one people don’t ask.
Get the eligibility confirmed, not assumed. Three dates settle most of it — when you signed, when you’re closing, and when you or your spouse last lived in a home either of you owned. That’s a short conversation and it’s considerably cheaper than a repayment.
Be careful with amendments. If anyone suggests restructuring an existing agreement to capture the enhanced rebate, get advice first. The paperwork being possible doesn’t make the rebate available.
If your value is near a threshold, check it properly. The difference between $1.84 million and $1.86 million is not marginal.
If it’s already happened
If the CRA has assessed you for a rebate that was credited at closing, you have 90 days from the date on the notice to file a Notice of Objection.
That deadline is firm, and it doesn’t matter who filed the original claim — your builder did, and you’re the one being assessed.
Whether an objection is worth filing depends on why it was denied. Some denials rest on facts that can be evidenced. Some rest on an interpretation that can be argued. And some are simply correct, in which case the useful advice is about the repayment rather than the fight.
We’ll tell you which of those you have, at no charge. That’s a more useful first answer than either optimism or panic.
The short version
A rebate credited at closing is advanced against your eligibility, not granted on it.
You remain responsible for qualifying, the liability is joint and several, and the question usually arrives long after the money has been spent.
Checking before you sign costs a conversation. Finding out afterwards costs the rebate.