HST Rebate on New Homes: Ontario’s Plan to Boost Housing Affordability

HST Rebate on New Homes: A Significant Boost for Ontario Buyers

Premier Doug Ford announced a significant initiative on Wednesday, March 25, 2026, aimed at revitalizing Ontario’s housing market. The province, in collaboration with the federal government, plans to temporarily expand the Harmonized Sales Tax (HST) rebate for new homes, making homeownership more accessible to a wider range of buyers. This expansion will allow all purchasers of new homes to claim a rebate of up to $130,000.

From First-Time Buyers to All Buyers

Previously, the HST rebate on new homes was exclusively available to first-time homebuyers through the federal GST/HST First-Time Home Buyers Rebate. However, this new proposal extends the benefit to all buyers for a one-year period, from April 1, 2026, to March 31, 2027. This move is designed to stimulate the construction sector, which has faced challenges due to rising building costs and decreased demand.

Rebate Details: What You Need to Know

Homes valued up to $1.5 million: Eligible for a maximum rebate of $130,000.
Homes valued between $1.5 million and $1.8 million: A reduced rebate will be available.
Homes valued above $1.85 million: Qualify for $24,000 in HST relief under the existing rebate program.

The provincial government will cover the eight per cent provincial portion of the HST, while the federal government will contribute the five per cent federal portion. The program’s implementation is contingent upon the passage of federal legislation.

Eligibility Criteria

To qualify for the expanded HST rebate, buyers must meet the following criteria:

The purchase agreement with the builder must be signed between April 1, 2026, and March 31, 2027.
Construction of the home must begin on or before December 31, 2028.
Construction must be substantially completed on or before December 31, 2031.
The home must be used as a primary residence or a residential rental property.

Alternatively, if construction began before March 31, 2026, the purchase agreement must be signed between April 1, 2026, and March 31, 2027, and construction completed by December 31, 2029.

Economic Impact and Industry Response

Government officials estimate the program will cost the province $1.4 billion. However, they project a significant economic return, including an estimated 8,000 additional housing starts, support for up to 21,000 jobs, and a $2.7 billion boost to the province’s real GDP. This initiative comes at a time when new condo projects in Toronto have struggled to launch, and new condo sales in the Greater Toronto and Hamilton Area (GTHA) have reached decades-low levels.

Premier Ford emphasized the goal of making homeownership more attainable for Ontario families, stating, “My message to everyone from the building sector here today is very simple. Start building.” He also urged municipalities to eliminate development charges, which can add substantial costs to new homes.

Dave Wilkes, President and CEO of the Building Industry and Land Development Association (BILD), lauded the move, stating it will “significantly reduce upfront homeownership costs.” He added, “This is a major step toward unlocking affordability in Ontario’s housing market and supporting the broader economy.”

Further Information

For more information on the federal GST/HST First-Time Home Buyers Rebate, visit the Canada Revenue Agency website. Stay tuned for updates on the provincial implementation of this expanded HST rebate program.

Source: CP24