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Ontario Expands HST Rebate on New Homes — What It Means for Buyers

New Row House Construction with wood sheathing and asphalt roof

There’s been a big announcement this week from the Province of Ontario, and it’s one that could have a meaningful impact on buyers—especially those considering new construction.

In partnership with the federal government, Ontario is expanding the HST rebate on new homes for a limited time, with the goal of improving affordability and encouraging more housing development.

More specifically, the province is planning to temporarily remove the Harmonized Sales Tax (HST) on new homes for qualifying buyers. The full 13% tax would be eliminated on homes valued up to $1 million from April 1, 2026 to March 31, 2027.

For homes priced between $1 million and $1.5 million, buyers would still qualify for the maximum rebate of up to $130,000, with the rebate gradually decreasing for higher-priced homes—down to approximately $24,000 for homes valued at $1.85 million.

Let’s break down what this actually means.

What changed?
Under this new program, the province is temporarily expanding the rebate structure so that significantly more buyers—and a wider range of home prices—can benefit over a one-year period.

Why this matters
From a real estate perspective, this is a pretty strategic move.

New construction has been one of the biggest pressure points in Ontario’s housing supply. Between rising construction costs, interest rates, and slower buyer activity, many builders have pulled back or delayed projects.

This rebate is designed to do two things:

• Stimulate demand by lowering the effective purchase price for buyers
• Encourage builders to move forward with projects

And in a market like Ottawa—where we rely heavily on a steady pipeline of new housing—this could help bring more inventory online.

What it means for buyers
If you’re considering a new build, this is where things get interesting.

A rebate of this size can:

• Reduce your upfront cost significantly
• Improve affordability on higher price points
• Potentially allow buyers to stretch into a better product or location

That said, timing will matter. This is a temporary program, and we’ll likely see increased competition in the new construction space as buyers start to take advantage of it.

The bigger picture
This announcement is really about one thing: supply.

Governments at both levels are trying to unlock more housing by making projects more viable and encouraging buyers back into the market.

Will it solve everything? No.
But it’s a meaningful step—and one that could create opportunities for buyers who understand how to position themselves.

Final thoughts
If you’re thinking about buying a new build this year, this is worth paying close attention to.

There may be a window here where:

• Pricing is still relatively stable
• Incentives are strong
• Inventory is improving

And those three things don’t always line up.

As always, the key is understanding how this fits into your overall plan—whether that’s buying your next home, relocating, or investing.

If you want to walk through how this impacts your specific situation, happy to chat.