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Expert Analysis

Real estate: HST relief for buyers, although temporary

By Balvinder Kumar ·

Law360 Canada (April 1, 2026, 9:22 AM EDT) --
Balvinder Kumar
Balvinder Kumar
On March 25, the Ontario government announced some temporary relief for buyers who are purchasing new homes. The harmonized sales tax (HST) rebate in Ontario is being expanded to all buyers to a maximum of $130,000. Both provincial and federal governments will eat up the entire 13 per cent HST. The province will cover its eight per cent, and federal will cover five per cent of the HST.

Sounds great! But this proposed expansion comes with some conditions. There are eligibility requirements, limit to property purchase price value, rebate amounts, construction requirements and a duration component to it. Broadly, I would divide this expansion into two segments. The first is the purchase price brackets or limits with its rebate amount, and second is the eligibility factor.

Under the purchase price brackets and its rebate, rebate decreases with the increase in the purchase price:

1. New homes valued up to $1 million will qualify for full 13 per cent rebate up to $130,000.

2. New home valued at and above $1.5 million will qualify for a maximum rebate of $130,000.

3. New homes valued at and above $1.85 million will qualify for a reduced rebate of $24,000.

Houses

Shendart: ISTOCKPHOTO.COM

Eligibility requirements for this new temporary rebate are:

1. Buyers who sign the purchase agreement between April 1, 2026, to March 31, 2027, will be eligible for this rebate.

2. All new homes that are used as a primary residence and as a residential rental property.

3. For new homes that will be used as a primary residence, construction must begin on or before Dec. 3, 2028, and must be completed on or before Dec. 31, 2031.

4. For new homes that will be used as a rental property, construction must be completed on or before Dec. 31, 2029.

New-build homes are often topped with many additional costs that are over and above the purchase price, like taxes, utility service charges, tree planting, driveway paving, development charges and so on, which increase the amount paid on closing to thousands of dollars. Of these, the major chunk is the payable HST rebate. This HST rebate incentive proposal comes at a time when the housing industry is struggling to survive. The purpose of this effort by the government is not only to ensure a reduction in costs, but it will also increase affordable housing for home buyers, making it attainable. The intention of this proposal is also to increase sales aimed at housing development.

This is a proposal only and still needs a legislation pass. Thus, its outcome and its impact on home buyers and the housing trade is yet to be seen and analyzed accordingly.

Balvinder Kumar practises real estate law (residential and commercial) and is a freelance writer and author with LexisNexis.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the author’s firm, its clients, Law360 Canada, LexisNexis Canada or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

Interested in writing for us? To learn more about how you can add your voice to Law360 Canada, contact Analysis Editor Peter Carter at peter.carter@lexisnexis.ca or call 647-776-6740.