Ontario Proposes HST Relief on New Homes: What It Means for Buyers

The Ontario government has announced a proposed temporary expansion of the HST rebate on new homes, an initiative aimed at making homeownership more affordable across the province. With rising housing costs impacting many communities, this measure could offer significant savings for buyers who qualify.

What’s Changing?

Currently, HST rebates on new homes are limited, but under this proposal, both the provincial and federal governments are working together to expand the relief available.

For eligible buyers, here’s how the new structure would work:

• Homes priced up to $1 million could receive up to $130,000 in HST relief, effectively eliminating the full 13% HST.
• Homes between $1 million and $1.5 million would still qualify for the maximum $130,000 rebate, reflecting today’s higher home prices.
• Homes priced from $1.5 million to $1.85 million would receive a reduced rebate on a sliding scale.
• Homes above $1.85 million would revert to the existing rebate structure, which provides up to $24,000 in relief.

Government Support Behind the Plan

Ontario estimates that this temporary expansion could deliver nearly $1.4 billion in provincial tax relief. In addition, the federal government has indicated its support by agreeing to help cover its portion of the HST (5%), pending the approval of federal legislation.

Eligibility and Timing

To qualify for the expanded rebate, several key criteria must be met. Eligibility is tied to important milestones in the purchase process, including:

• When the purchase agreement is signed
• When construction begins
• When construction is completed

The expanded rebate is proposed as a temporary measure, available for agreements made between:

April 1, 2026 and March 31, 2027

The home must also be used as:

• Your primary residence, or
• A residential rental property

Examples of Eligible Purchases

While specific details will depend on final legislation, here are two general examples of scenarios that would typically qualify for the expanded rebate:

• A buyer purchases a new construction home within the eligible timeframe, and construction begins and is completed within the program guidelines.
• An investor purchases a newly built property intended for long-term residential rental, meeting the same timing requirements for agreement and construction.

What This Means for Buyers

For many buyers, especially those entering higher-priced markets, this proposal could significantly reduce upfront costs. However, it’s important to note that while the rebate is available to buyers, builders ultimately determine how the rebate is applied in the purchase price.

Final Thoughts

If implemented, this expanded HST relief could be a major opportunity for buyers looking to enter the new construction market. Whether you’re purchasing your first home or investing in a rental property, understanding how these rebates work can help you make more informed decisions.

If you’re considering buying a new build and want to understand how this rebate could apply to your situation, feel free to reach out.

I’d be happy to help you navigate your options.