Nov 15, 2026
If you signed with a builder in Ontario after April 1, the math on a new home looks different than it did a year ago. On a $700,000 new townhouse, the expanded harmonized sales tax (HST) rebate can erase $91,000 in tax. That’s more than a bit of pocket change.
Six months in, that incentive is moving buyers, though not all of them. New detached homes, semis and townhouses in the Greater Toronto Area are selling well above normal. Meanwhile, new condo sales in the same area just hit a September record low.
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The clock is also running on the ability to take advantage of the rebate. Buyers have until March 31, 2027 to sign, and the province says no extension is coming, so it pays to know which side of the line you’re on.
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How does the expanded HST rebate work?
With the expanded HST rebate, eligible buyers can recover the full 13% HST on a new home priced up to $1 million, to a maximum of $130,000. According to an Ontario Ministry of Finance briefing, that cap holds for homes between $1 million to $1.5 million. Beyond that, relief shrinks to the existing $24,000 provincial rebate for homes worth $1.85 million or more, according to the Toronto Regional Real Estate Board (TRREB).
To qualify, buyers must:
- Buy the home as their primary residence
- Sign with the builder between April 1, 2026 and March 31, 2027
- Buy a home where construction starts by Dec. 31, 2028
- Buy a home that’s substantially completed by Dec. 31, 2031
The CRA administers the rebate, and builders can now credit it to buyers on closing.
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Who is benefiting 6 months in?
So far, the winners are mostly buyers of low-rise properties. September was the sixth straight month that new low-rise sales in the GTA beat their 10-year average, according to data released Oct. 22.
The data shows there were 820 low-rise sales, 17% above normal, and more than half were semis and townhouses. Prices have helped too. The benchmark new low-rise price dropped 13.3% in a year to $1,246,764, and that’s before any rebate.
Province-wide, 4,765 families bought new homes because of the rebate in its first three months, according to Building Industry and Land Development Association (BILD), which represents more than 1,000 GTA building and development companies.
Opening the rebate up to all buyers was key. First-time buyers, who previously had exclusive access to the full rebate, account for only about 19.9% of new homes sold nationally, according to the Office of the Parliamentary Budget Officer.
Why are condo buyers being left behind?
A different story is unfolding in the condo market. Just 129 new high-rise units sold in the GTA in September. That’s a record low for the month and 90% below the 10-year average, according to BILD.
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The problem, according to BILD, is timing. Many condo projects can’t meet the rebate’s construction deadlines, leaving fewer eligible units to buy. Altus Group, BILD’s data provider, adds that much of the unsold stock isn’t what buyers want.
The result is a glut of roughly 12,909 unsold condo units, or about 49 months worth of supply. Low-rise homes have about 11 months of supply. Justin Sherwood, chief operating officer at BILD, called September’s numbers “a wake-up call” to change the program’s rules.
Resale buyers get nothing at all, as the rebate applies only to new or substantially renovated homes bought from a builder.
Will the HST rebate be extended?
Don’t count on the HST rebate being extended. The program is expected to cost the province $1.4 billion, and Finance Minister Peter Bethlenfalvy rejected an extension in March, even as the Ontario Home Builders’ Association pushed for permanent relief.
The province projects the rebate could add 8,000 housing starts. Critics warn the gains come with a significant fiscal cost. The condo slump also shows the relief isn’t reaching every part of the market.
What to do now
If you’re shopping for a new home in Ontario, these steps can help protect the savings:
- Sign your contract before March 31, 2027, and assume there won’t be an extension
- Ask the builder, in writing, when construction will start and finish
- Have a real estate lawyer review the agreement for rebate clauses, including who pays if the project misses a deadline
- Confirm you’ll live in the home as your primary residence
- Tell your real estate lawyer if you’re a first-time buyer, since it affects which CRA rebate forms you file
- Compare the after-rebate price with similar resale homes nearby
For a buyer eyeing a townhouse in a project that’s already breaking ground, the rebate can be worth tens of thousands of dollars. For condo hunters and resale buyers, however, it may change very little. Either way, plan around the deadline the government has set, not the one the industry hopes for. As Bethlenfalvy put it: “This is a one-year sale to help people with affordability.”
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Leslie Kennedy served as an editor at Thomson Reuters and for Star Media Group, followed by a number of years as a writer and editor and content manager in marketing communications, before returning to her editorial roots. She is a graduate of Humber College’s post-graduate journalism program and has been a professional writer and editor ever since.
