HST Relief for New Home Purchases
As of March 2026, Canada has introduced a major housing affordability measure with the federal government officially passing a rebate that eliminates up to $50,000 in GST on newly built homes for first time buyers. At the same time, Ontario is planning to remove its 8% provincial portion of the HST as well, with discussions underway to potentially expand the benefit beyond just first-time buyers. If both levels of government align, this could result in up to 13% in tax savings worth as much as $130,000 making new construction significantly more affordable and creating renewed momentum in the housing market.
What’s Changing
From April 1, 2026 through March 31, 2027, buyers of newly constructed homes that will serve as their principal residence may qualify for significant HST savings. Because this measure is in place for only one year, timing will be an important consideration for anyone planning a purchase.
The details of the relief are as follows:
| Home Price Range | HST Treatment |
| Homes under $1 million | Full exemption from the 13% HST |
| Homes between $1 million and $1.5 million | A flat $130,000 reduction in HST |
| Homes between $1.5 million and $1.85 million | A gradually decreasing reduction, from $130,000 down to the existing $24,000 provincial rebate |
| Homes above $1.85 million | Continue to qualify only for the standard $24,000 provincial rebate |
These changes apply only to agreements of purchase and sale signed on or after April 1, 2026. Agreements signed before that date will remain subject to the current HST rules. Government officials have also confirmed that eligible rebates may be assigned back to the builder within the purchase agreement. Substantially renovated homes, which are treated as new construction for HST purposes under existing legislation, are also included in this measure.
What This Means for Home Buyers
Because the HST relief is temporary and tied to a specific 12‑month window, buyers who are considering a new home purchase may wish to evaluate whether completing an agreement during this period could provide meaningful tax savings. The benefit will depend on the purchase price and the timing of the agreement. Eligibility criteria for the expanded rebates include when a purchase agreement is entered into, when construction begins and when construction is completed.
The following are two examples of purchases that would generally be eligible for expanded relief.
An individual acquires a new home for use as their primary place of residence and:
- the purchase agreement with the builder was signed between April 1, 2026 and March 31, 2027;
- construction of the home begins on or before December 31, 2028; and
- construction is substantially completed on or before December 31, 2031.
A purchaser who acquires a new home where construction began before March 31, 2026 for use as a residential rental property and:
- the purchase agreement with the builder was signed between April 1, 2026 and March 31, 2027;
- construction is substantially completed on or before December 31, 2029.
HST Relief for First-Time Home Buyers
Working to remove the 8 per cent provincial portion of HST for first-time home buyers on homes valued up to $1 million in partnership with the federal government.
Ontario is proposing a temporary expansion of existing HST relief on new homes. Subject to eligibility:
- For new homes valued up to $1 million, Ontario, with the support of the federal government, would provide up to $130,000 in relief, equivalent to the full 13 per cent HST.
- The $130,000 maximum rebate would be maintained for new homes valued between $1 million and $1.5 million, reflecting the reality of housing costs in many Ontario communities.
- A reduced rebate would be available for new homes valued between $1.5 million and $1.85 million. New homes above $1.85 million would qualify for $24,000 in HST relief under pre-existing rebate.
- Ontario’s contribution to the temporary expansion of HST rebates on new homes would provide almost $1.4 billion in estimated total provincial tax relief.
- The federal government has agreed to cost-share with Ontario in support of provincial housing initiatives, subject to passage of federal legislation, which would approximately cover the federal 5 per cent portion of the HST that is being removed from new homes in Ontario.
The expanded relief would be available from April 1, 2026 to March 31, 2027 and the new home must be used as a primary place of residence or as a residential rental property.
To take full advantage of this opportunity, connect with AM Real Estate Group Adnan Mian will guide you through the process, help you find the right property, and ensure you maximize all available HST savings. Whether you’re a first-time buyer or exploring new construction options, expert support can make all the difference in securing the best deal.
