Ontario plans 1-year HST relief on qualifying new homes

Ontario says it plans to temporarily expand HST relief on qualifying new homes for one year. The announcement came on March 25, one day before the province’s 2026 budget, and the proposed relief window would run from April 1, 2026 to March 31, 2027.

This is a big housing story, but the simple headline can be misleading. Ontario is not removing HST from every home sale. This is a proposed temporary expansion of existing rebates for qualifying new homes, and the province says it is still subject to federal regulatory enactment.

That means resale homes are not the focus here. The proposal is aimed at newly built homes that meet the rules, and the home must be used as a primary residence or as a residential rental property.

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What Ontario announced about HST relief

Ontario says buyers of qualifying new homes priced at up to $1 million could get relief worth up to $130,000, which the province describes as equal to the full 13 per cent HST. For homes priced between $1 million and $1.5 million, the maximum rebate would still stay at $130,000.

For homes priced between $1.5 million and $1.85 million, the rebate would shrink on a sliding scale. For homes above $1.85 million, buyers would fall back to the older rebate level of $24,000.

Ontario’s own examples help show how this would work in real life. The province says a $700,000 home could get about $91,000 in relief, a $1.2 million home could get $130,000, and a $1.7 million home could get about $69,500.

What changed from the earlier plan

This is also wider than Ontario’s earlier first-time buyer plan. In the 2025 Fall Economic Statement, the province said it would work to remove the 8 per cent provincial portion of HST for first-time home buyers on qualifying new homes, in step with a proposed federal rebate. Under that earlier setup, the combined provincial and federal help could remove the full 13 per cent HST for qualifying first-time buyers, but it was not meant for everyone.

The new March 2026 proposal is broader. Ontario and current news reports say the temporary expanded relief would apply to all eligible buyers of qualifying new homes during that one-year window, not just first-time buyers.

The dates matter more than many headlines suggest

The government’s examples show that eligibility is not based only on price. Timing matters too. The province says it will look at when the purchase agreement is signed, when construction begins, and when the home is substantially completed.

For a buyer using the home as a primary residence, Ontario’s example says the purchase agreement must be signed between April 1, 2026 and March 31, 2027. Construction must begin on or before December 31, 2028, and the home must be substantially completed on or before December 31, 2031.

For a residential rental property example, Ontario says construction must have begun before March 31, 2026. The purchase agreement still must be signed during the same one-year window, and the home must be substantially completed on or before December 31, 2029.

So this is not just “buy any new home next year and pay no HST.” Buyers would still need to fit the province’s timing rules and whatever final eligibility details are released. Ontario says more details will be published on Ontario.ca by the end of March or around the 2026 budget release.

Why the province says it is doing this

Ontario is pitching the move as both an affordability measure and a construction-sector support plan. The province says the expanded relief could help trigger 8,000 additional housing starts, support up to 21,000 jobs, and boost Ontario real GDP by $2.7 billion.

The province also says its own share of the temporary expansion would provide almost $1.4 billion in provincial tax relief. In addition, Ontario says the federal government has agreed to cost-share the measure, roughly covering the federal 5 per cent portion of the HST being removed, but that still depends on federal legislation or regulatory action.

That federal condition is one of the most important details in the whole story. It is why this should still be described as a proposal or planned measure, not as a final tax change already locked in for every buyer.

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What this could mean for buyers

For buyers already looking at pre-construction or newly built homes, the savings could be meaningful. On paper, a qualifying $800,000 new home would carry $104,000 in HST at 13 per cent, so relief at that level would be huge if the buyer and the home meet the final rules. That arithmetic follows directly from Ontario’s statement that homes up to $1 million could get relief equal to the full 13 per cent HST.

But buyers should be careful not to treat this like a simple across-the-board discount. The announcement is about qualifying new homes, not resale homes. It also comes with date rules, use-of-home rules, and a federal implementation step.

For anyone shopping now, the practical move is to read the agreement terms closely, ask the builder how rebate assignment would be handled, and watch for the province’s final eligibility page once it is posted. The CRA already administers HST housing rebates, so the paperwork side matters just as much as the headline number.

HST relief FAQ

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