HST Relief for New Home Purchases in Ontario

Posted on March 25th, 2026 in Construction & Real Estate, Domestic Tax

New home under construction, just wood and insulation.

The Ontario government has announced a one‑year change to the harmonized sales tax (HST) that may benefit individuals planning to purchase a newly built home. The announcement was made on March 25, 2026, by Premier Doug Ford and provincial officials.

What’s Changing

From April 1, 2026 through March 31, 2027, buyers of newly constructed homes that will serve as their principal residence may qualify for significant HST savings. Because this measure is in place for only one year, timing will be an important consideration for anyone planning a purchase.

The details of the relief are as follows:

Home Price Range	HST Treatment
Homes under $1 million	Full exemption from the 13% HST
Homes between $1 million and $1.5 million	A flat $130,000 reduction in HST
Homes between $1.5 million and $1.85 million	A gradually decreasing reduction, from $130,000 down to the existing $24,000 provincial rebate
Homes above $1.85 million	Continue to qualify only for the standard $24,000 provincial rebate

These changes apply only to agreements of purchase and sale signed on or after April 1, 2026. Agreements signed before that date will remain subject to the current HST rules. Government officials have also confirmed that eligible rebates may be assigned back to the builder within the purchase agreement.

Substantially renovated homes, which are treated as new construction for HST purposes under existing legislation, are also included in this measure.

What This Means for Home Buyers

Because the HST relief is temporary and tied to a specific 12‑month window, buyers who are considering a new home purchase may wish to evaluate whether completing an agreement during this period could provide meaningful tax savings. The benefit will depend on the purchase price and the timing of the agreement.

What This Means for Home Builders

Increased buyer interest is likely for homes priced below $1.85 million due to the enhanced affordability.
Sales strategies and pricing models may need to be reviewed to reflect the new tax environment.
Assignment of rebates back to the builder within the agreement of purchase and sale may influence cash‑flow planning.
Project timing could become more important, as buyers may aim to sign agreements within the one‑year window to secure the tax benefit.
Builders may want to assess how this measure affects demand forecasts, inventory planning, and marketing efforts for the upcoming year.

If you have questions about how these changes may impact your projects or clients, please contact a DJB advisor.

Read the official government news release here.