Ontario Just Eliminated the HST on New Homes - Here Is What You Need to Know

If you have been watching the news, you may have heard that Ontario recently made a significant move to help homebuyers.

As of April 1, 2026, the province is temporarily eliminating the full 13% HST on newly built homes priced up to $1 million - and this applies to all buyers, not just first-time buyers.

This is one of the largest tax incentives for homebuyers that Ontario has introduced in a very long time. Here is a plain-language breakdown of what is happening, who qualifies, and how much you could actually save.

Two Programs Working Together

There are now two separate programs stacking on top of each other to reduce or eliminate the HST on new construction in Ontario.

1. The Federal First-Time Buyer GST Rebate (Bill C-4)

This program eliminates the 5% federal portion of the HST on newly built homes for eligible first-time buyers. It covers homes priced up to $1 million (full rebate) and offers a partial rebate on homes between $1 million and $1.5 million. Purchase agreements must be signed between March 20, 2025 and December 31, 2030. The maximum savings under this program are $50,000.

2. Ontario's Expanded HST Rebate

Announced on March 25, 2026, this program eliminates the 8% provincial portion of the HST on new homes for all buyers - including investors purchasing residential rental properties - for a one-year window. To access the full combined 13% relief, your purchase agreement must be signed between April 1, 2026 and March 31, 2027.

When both programs are stacked together, eligible buyers can save up to **$130,000** on a single new home purchase.

Who Qualifies?

For Ontario's expanded rebate (April 1, 2026 to March 31, 2027)

- All buyers qualify - first-time or not
- The home must be newly built or substantially renovated
- The home must be used as a primary residence or residential rental property
- Your purchase agreement must be signed within the one-year window
- For primary residences, construction must begin on or before December 31, 2028 and be substantially completed by December 31, 2031
- For rental properties, construction must be substantially completed by December 31, 2029

For the federal First-Time Buyer GST Rebate:

- You must be at least 18 years old
- You must be a Canadian citizen or permanent resident
- You must not have owned and occupied a primary residence in the current calendar year or the four preceding years
- The property must be your primary place of residence
- Your purchase agreement must have been entered into on or after March 20, 2025

If you have previously qualified for programs like the Home Buyers' Plan (HBP) or the First Home Savings Account (FHSA), you will very likely qualify for the federal rebate as well.

How Much Can You Save?

To put this in concrete terms: a first-time buyer purchasing a $900,000 newly built home in Ontario between now and March 2027 could save approximately $117,000 in HST. That is more than many buyers contribute toward a down payment.

For non-first-time buyers purchasing during the same window, the full 13% HST is still eliminated through the federal-provincial cost-sharing agreement - meaning you do not need to be a first-time buyer to access significant savings right now.

What About Resale Homes?

These rebates apply exclusively to newly built and substantially renovated homes. Resale properties are not subject to HST, so they are not eligible for either program.

Can You Stack These with Other Incentives?

Yes. Both rebates are separate from other federal programs, and you can combine them with:

- The **Home Buyers' Plan (HBP)** - withdraw up to $60,000 from your RRSP for a home purchase
- The **First Home Savings Account (FHSA)** - tax-deductible contributions and tax-free withdrawals for a first home
- The **First-Time Home Buyers' Tax Credit** - a $10,000 non-refundable credit worth up to $1,500 in tax savings

How Is the Rebate Applied?

For transactions closing after April 1, 2026, the rebate is designed to be credited directly on your statement of adjustments at closing. Your builder applies it and then claims it from the CRA on your behalf - so you are not waiting for a cheque to arrive after the fact. Your real estate lawyer should confirm the amounts at closing.

If you signed a purchase agreement between March 20, 2025 and March 12, 2026 (before Royal Assent on the federal bill), you are still eligible - but you will need to apply to the CRA directly to claim your federal rebate retroactively.

What This Means for You

Whether you are a first-time buyer, a move-up buyer, or someone looking at purchasing a rental property, the window to take advantage of the full combined 13% HST elimination is open right now - and it closes on March 31, 2027.

Understanding how these programs interact with your overall mortgage and financing strategy matters. The savings are real, but so is the importance of making sure your financing is structured properly before you sign.

If you have questions about how this affects your purchasing power or want to understand your options, I am happy to walk you through it. Reach out at www.MortgageCall.ca or email me directly.

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This blog post is for informational purposes only and does not constitute legal, tax, or financial advice. Program eligibility criteria and rebate amounts are subject to change. Please consult a qualified legal or tax professional before entering into any purchase agreement.