The Ontario housing landscape just received a massive jolt. On March 25, 2026, the provincial government announced a major expansion to the HST rebate for new home builds, aiming to make the "dream of homeownership" a reality for thousands more families.

If you are looking to buy or build a new home in Ontario, here is everything you need to know about these game-changing updates.

1. The Big News: Full 13% HST Relief

Under the previous rules, the HST rebate was capped, often leaving buyers of new homes with a significant tax bill. The new proposal effectively removes the full 13% HST for eligible buyers of new homes valued up to $1 million.

• Maximum Savings: Up to $130,000 (combined provincial and federal relief).

• The Partnership: This is a joint effort where Ontario removes its 8% portion and the Federal government has agreed to "approximately" cover the 5% GST portion.

2. Who is Eligible?

Unlike previous incentives that were strictly for first-time buyers, this one-year expansion is significantly broader.

• Primary Residences: Individuals buying a new home (detached, semi, condo, or townhouse) to live in.

• Rental Properties: The rebate also applies to new residential rental properties, supporting investors who provide long-term housing.

• The "One-Year Window": To qualify for this specific expanded relief, the Agreement of Purchase and Sale must be signed between April 1, 2026, and March 31, 2027.

3. Important Deadlines & Timelines

The government wants "shovels in the ground," so they have tied the rebate to specific construction milestones:

• Construction Start: For homes purchased during the one-year window, construction must begin on or before December 31, 2028.

• Completion: The home must be substantially completed by December 31, 2031.

Note for First-Time Buyers: If you are a first-time buyer, you may have even more flexibility. Separate provincial and federal rebates for first-time buyers apply to agreements signed as far back as March 20, 2025, and extending through 2030.

4. Why This Matters for the Market

This move is expected to spur approximately 8,000 additional housing starts in Ontario over the next year. By removing the tax barrier, the government hopes to:

1. Lower the "sticker price" of new homes.

2. Offset the impact of high interest rates and economic uncertainty.

3. Support up to 21,000 jobs in the construction sector.

The Bottom Line

This is one of the most significant tax breaks for Ontario homebuyers in decades. However, because it involves both provincial and federal legislation (and amendments to the Excise Tax Act), the details are still being finalized in the 2026 Budget.

If you are planning a purchase, now is the time to speak with your builder and a tax professional to ensure your contract is structured to take full advantage of these savings.