HST is not a mysterious renovation surcharge. It is tax. For a taxable supply made in Ontario, the Canada Revenue Agency lists the HST rate as 13%. If an Ontario contractor quotes $40,000 before tax, the invoice total is $45,200. The calculator is not being dramatic. It is merely Canadian.
The basic 13% renovation math
Swipe to compare
| Pre-tax amount | 13% HST | Invoice total |
|---|---|---|
| $5,000 | $650 | $5,650 |
| $25,000 | $3,250 | $28,250 |
| $75,000 | $9,750 | $84,750 |
The tax normally applies to the contractor's taxable supply, including labour and materials that form part of it. It also applies to approved extras. If a $2,000 change order is written before tax, the added invoice is $2,260. This is why every allowance, credit, and change order should say how tax is treated. Arithmetic loves a labelled column.
A contractor may be a small supplier who is not required to register, or may have another valid tax status. That does not create a universal cash price with no HST coupon. If a business charges HST, the CRA says invoices for taxable supplies of $100 or more must include its GST/HST account number. You can use the CRA's free GST/HST Registry to check the first nine digits against the business name and transaction date.
What should appear on the paperwork
- The contractor's legal or operating name and contact information.
- A pre-tax subtotal, the HST rate and amount, and the after-tax total.
- The GST/HST account number where the invoice rules require it.
- A clear tax treatment for allowances, credits, deposits, and change orders.
- Paid receipts tied to the contract and invoice number, not a mysterious e-transfer floating through space.
Keep the contract, drawings, change orders, invoices, proof of payment, and final approvals together. Those records matter for tax questions, insurance, resale, warranty, and any rebate application. A shoebox can technically hold paper. It cannot search paper.
A regular renovation is not an HST rebate project
The phrase home renovation rebate causes trouble because it sounds broad. The CRA's new housing rebate guidance is not a refund for replacing cabinets, rebuilding one bathroom, finishing a basement, or installing a deck. For an owner-built substantial renovation, generally 90% or more of the existing home's interior must be removed or replaced, excluding listed structural elements. That is a gut, not a glow-up.
A major addition can qualify in limited circumstances, but the CRA uses a much higher bar than we added a bedroom. Its guidance gives the example of an addition that at least doubles the living area, such as a full second storey on a bungalow. Eligibility also depends on occupancy, ownership, timing, value, and which federal or Ontario rebate is being claimed. Use an accountant who understands GST/HST housing rebates before building the budget around one.
The temporary 2026 Ontario enhanced rebate
Ontario introduced temporary enhanced relief for qualifying new or substantially renovated homes. For an owner-built home, the current CRA eligibility page says construction or substantial renovation generally must begin from April 1, 2026 through March 31, 2027, be substantially completed by the stated deadline, and satisfy the other Ontario new-housing conditions and value limit. This is useful, but it does not turn every 2026 reno into a rebate.
The CRA application guidance for owner-built homes says the owner files the forms and keeps the supporting construction summary. Do not let a salesperson casually subtract a hoped-for rebate from the contract total. Eligibility belongs in a tax file, not in a closing pitch.
HST, deposits, and the statutory holdback
A deposit is part of the contract price, not a separate tax-free island. Holdback timing is more technical. CRA guidance on GST/HST and home construction has specific rules for when tax on a construction holdback becomes collectible. Your contract and invoices should show the base amount, HST, payments, and holdback without making the homeowner reverse-engineer a Sudoku puzzle.
For quote comparison, normalize every bid to the same after-tax scope. Our guide to reading an Ontario renovation quote covers allowances and exclusions; the Ontario holdback guide explains why the last 10% is not just a punch-list bargaining chip.
