Ontario Temporarily Eliminates HST on New Homes — Buyers Can Save Up to $130,000

In a major move to address housing affordability and stimulate new construction, the Government of Ontario—working in partnership with the federal government—has announced a temporary expansion of the HST rebate that effectively eliminates the full 13% HST on new homes for eligible buyers.

This is not a minor adjustment to an existing rebate. It is a short-term, high-impact incentive designed to reduce upfront costs, accelerate housing starts, and restore momentum to Ontario’s housing market.

What’s Changing

Under the proposed program, buyers could receive up to $130,000 in total HST relief, equivalent to the full 13% HST on qualifying new homes. Key details include:

- Maximum $130,000 rebate maintained up to $1.5 million

- Gradual phase-out between $1.5M–$1.85M

- Homes above $1.85M revert to the existing $24,000 rebate

- Full HST relief on new homes up tp $1 million

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Unlike previous programs, this expansion applies to: First-time home buyers, repeat buyers, and investors purchasing residential rental properties

The only requirement is that the property must be used as a primary residence or rental housing.

A Time-Sensitive Opportunity

One of the most important aspects of this program is its limited timeline.

The expanded rebate is proposed to apply to:

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- Agreements signed between April 1, 2026 and March 31, 2027

- With construction timelines extending through 2031

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This creates a clear 12-month window to act, making it one of the most time-sensitive housing incentives introduced in recent years.

Why This Matters for the Market

Ontario has cited economic pressures, including rising construction costs and slowing housing activity, as key reasons behind this initiative.

The goal is not just affordability—it’s market activation.

The province estimates this program could:

- Drive 8,000 additional housing starts

- Support over 20,000 jobs

- Contribute approximately $2.7 billion to GDP growth

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By removing a major upfront cost, the government is aiming to:

- Increase demand for new construction

- Improve project viability for developers

- Accelerate supply in a constrained market

What This Means for Buyers and Investors

For buyers, this is one of the most significant cost-saving opportunities in recent history. A $1M home could see the entire HST removed—dramatically lowering the total purchase price.

For investors, the inclusion of rental properties is a major shift. This opens the door for increased participation in purpose-built and pre-construction housing.

The Bottom Line

This is more than a rebate—it is a temporary tax elimination designed to unlock housing supply and affordability at scale.

With up to $130,000 in savings and a defined timeline to act, this policy has the potential to reshape buyer behaviour, accelerate development, and reignite momentum across Ontario’s housing market.

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