Ontario Drops HST on New Homes Up to $1M: Up to $130,000 in Tax Relief

Breaking: Ontario's 2026 Budget Kills HST on New Homes

If you've been sitting on the sidelines waiting for the right moment to buy a new home in Ontario, March 26 might just be the day the math finally changed in your favour. As part of its 2026 Budget tabled today, the Ontario government announced it's removing the full 13% Harmonized Sales Tax on eligible new homes priced up to $1 million — a move that could put up to $130,000 back in a buyer's pocket.

That's not a typo. Up to $130,000 in tax relief on a single home purchase, for a temporary one-year window running from April 1, 2026 through March 31, 2027. And crucially, the federal government has agreed to cost-share the program, covering the five per cent federal portion of the HST — pending passage of federal legislation.

The two levels of government estimate the combined measure will deliver nearly $2.2 billion in housing-related tax relief across Ontario.

How the Ontario HST Rebate for New Homes Works in 2026

The rebate structure is tiered based on purchase price. Here is how it breaks down:

New homes priced up to $1 million: Buyers receive the full 13% HST rebate, up to a maximum of $130,000. The full tax bill wiped out on the tax portion of your new build.

New homes priced up to $1.5 million: The maximum $130,000 rebate still applies. A buyer purchasing a $1.4 million new home gets the same $130,000 back as someone buying at $1 million.

New homes priced $1.5 million to $1.85 million: The rebate phases down on a sliding scale from $130,000 at the $1.5 million mark, dropping to a maximum of $24,000 for homes priced at $1.85 million and above.

It helps to put those numbers in concrete terms. On a $900,000 new condo, you're looking at $117,000 in tax savings. On a $1.2 million townhome, the full $130,000 rebate applies. For a lot of buyers — especially those who've been priced out of new construction — this changes the entire affordability calculation.

Who Qualifies for the Ontario HST New Home Rebate?

Eligibility rules stay the same as under Ontario's existing new housing rebate programs. The home must be purchased for use as the buyer's primary place of residence, or as a residential rental property. This applies equally to owner-occupants and investors building out the rental supply — a deliberate policy choice.

Ontario is also separately removing the provincial portion of the HST on qualifying purpose-built rental housing, stacking on existing incentives to get more rental units built.

The enhanced rebate builds on changes the province made last October, when Ontario first proposed removing the full eight per cent provincial portion of the HST for first-time home buyers of new homes up to $1 million. Today's announcement blows that open — it covers all eligible buyers, not just first-timers, and includes federal cost-sharing on the five per cent federal slice.

What the Government Is Saying

Premier Doug Ford framed the announcement as a direct response to tariff pressure and economic headwinds facing Ontario families. "In the face of tariffs and economic uncertainty, our government is working closely with the federal government to do everything we can to lower costs for families, keep workers on the job and build the most competitive, resilient and self-reliant economy in the G7," Ford said. "Today's announcement will provide meaningful and significant relief to the people of Ontario, helping thousands more families realize the dream of homeownership and boosting Ontario's economy by $2.7 billion."

Finance Minister Peter Bethlenfalvy put it squarely in terms of household costs. "Ontarians have seen costs increase as a result of ongoing economic uncertainty, so it is more important than ever that we continue to keep costs down to make life more affordable for families and individuals," Bethlenfalvy said. "With this enhancement and expansion of the HST rebates, we are supporting home affordability while providing relief to hardworking Ontario families on one of the biggest financial transactions of their lives."

Housing Minister Rob Flack tied the rebate to the province's broader supply push. "Homeownership is a cornerstone of Ontario's economic success," Flack said. "Ontario thrives only when its people thrive. That is why our government is taking this massive step forward to protect Ontario by creating conditions to get more shovels in the ground, build more homes faster and help make the dream of homeownership a reality for more people."

The Economic Case Behind the Policy

Ontario isn't just selling this as an affordability measure. The province is positioning it as economic stimulus at a time when tariff uncertainty is weighing on consumer and business confidence alike.

The numbers are significant. According to the province's own projections, the expanded HST rebate could spur 8,000 additional housing starts in Ontario over the next year, support up to 21,000 jobs in construction and related trades, and add roughly $2.7 billion to Ontario's GDP. That's a meaningful multiplier effect on a $2.2 billion tax relief package.

The announcement also lands against a challenging backdrop for new construction. Higher land costs, development charges, and interest rate volatility have slowed pre-construction sales across the GTA over the past two years. Removing the HST on new builds below $1 million directly addresses one of the most significant cost drivers builders and buyers face — and could be the catalyst that unfreezes a significant number of stalled projects.

What This Means for the New-Build Market

For buyers, the math is genuinely different starting April 1. Ontario's new home market — particularly in the condo and townhome segment — has been sluggish, with a large inventory overhang in the pre-construction space. This rebate, applied at the time of closing, effectively makes new builds dramatically more competitive against resale properties that carry no HST.

It also opens doors for buyers who may have been a few thousand dollars short of qualifying for a new-construction mortgage. Knowing that $100,000-plus in taxes won't be added at closing changes the stress test math and the down payment calculation.

For builders, the incentive is clear: pre-construction sales that had stalled over affordability concerns now have a compelling trigger to convert. A one-year window creates urgency. Buyers who've been watching from the sidelines have a concrete deadline to act before the rebate potentially disappears.

The province has indicated further implementation details on the expanded HST rebates will follow today's Budget formal tabling. The April 1 start date gives buyers and builders just days to prepare.

If you're in the market for a new build in Ontario, this is the headline you've been waiting for.