Huge Ontario HST Rebate Could Change Home Buying in 2026!
- Hibaq A
- Apr 11
- 2 min read
Ontario is taking a significant step to make buying a new home more affordable and to encourage more housing construction. The province’s 2026 Budget includes a proposal to temporarily expand the Harmonized Sales Tax (HST) rebate on new homes. This move could save eligible buyers up to $130,000 and stimulate the housing market during a time of economic uncertainty.
What the HST Rebate Expansion Means for Homebuyers
Starting April 1, 2026, and lasting for one year, Ontario plans to remove the full 13 per cent HST on new homes valued up to $1 million. This means buyers of these homes could save as much as $130,000. For homes priced between $1 million and $1.5 million, the maximum rebate still applies. For homes valued above $1.5 million, the rebate decreases gradually but remains at least $24,000 for homes up to $1.85 million and above.
This rebate applies to homes purchased as a primary residence or as residential rental properties. The province is also aligning part of this rebate with the federal government's first-time home buyer rebate, which is set to take effect on March 20, 2025.
Partnership with the Federal Government
Ontario has secured an agreement with the federal government to share the cost of this rebate expansion. The federal government will cover the five per cent portion of the HST, pending federal legislation. Together, this partnership could provide nearly $2.2 billion in joint tax relief to homebuyers.
This collaboration not only eases the financial burden on buyers but also signals a coordinated effort to address housing affordability and stimulate the construction sector.
Economic Impact and Job Creation
The government estimates that the expanded rebate could lead to 8,000 additional housing starts in 2026-2027. This increase in construction activity is expected to support up to 21,000 jobs across Ontario, spanning construction workers, suppliers, and related industries.
Moreover, the boost in housing construction and sales could add $2.7 billion to Ontario’s Gross Domestic Product (GDP). This economic stimulus is particularly important as the province navigates a period of economic uncertainty.
Part of a Broader Housing Strategy
This rebate expansion is one piece of Ontario’s larger plan to improve housing affordability and availability. The province is also removing the provincial portion of HST on qualifying purpose-built rental housing. Additionally, investments in housing infrastructure will continue through programs like the Municipal Housing Infrastructure Program and the Building Faster Fund.
These combined efforts aim to speed up the construction of new homes and rental properties, helping to meet the growing demand for housing in Ontario.
What Buyers Should Know
The rebate applies only for one year, from April 1, 2026, to March 31, 2027.
Eligibility rules remain consistent with existing programs.
The home must be a primary residence or a residential rental property.
The rebate amount depends on the home’s purchase price, with full rebates up to $1 million.
The federal government’s participation is subject to legislation.
This proposal offers a clear opportunity for prospective homebuyers and investors to save on new home purchases while supporting the province’s housing market.
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