Ontario Eliminates HST on New Homes Under $1 Million: Tax Breaks Explained

What this means for you: If you plan to buy a newly built home in Ontario, you could save up to $130,000 in taxes. This change lowers the upfront cost of buying and makes it easier to qualify for a mortgage.

The Ontario and federal governments have announced a major tax break for new housing. Starting in 2026, the 13% Harmonized Sales Tax (HST) will be removed on many new builds.

Here is how the new rules work and how you can benefit.

The Key Numbers and Dates

This tax relief is temporary. It only applies to homes that close (ownership transfers) between these dates:

Start Date: April 1, 2026
End Date: March 31, 2027

The amount you save depends on the final price of the home.

1. Homes Under $1 Million

Savings: The full 13% HST is eliminated.
Impact: This is the biggest saving. For a home priced at $800,000, the tax savings would be $104,000.
Note: This effectively removes the federal portion of the HST on these homes.

2. Homes Between $1 Million and $1.5 Million

Savings: You get a flat $130,000 tax reduction.
Impact: Even though the price is higher, the government caps the relief at $130,000 to keep it fair.

3. Homes Between $1.5 Million and $1.85 Million

Savings: The reduction phases out gradually.
Details: The savings start at $130,000 and slowly decrease until they hit the standard rebate amount ($24,000) at the $1.85 million mark.

4. Homes Over $1.85 Million

Savings: You receive the existing Ontario rebate of $24,000.
Impact: No new extra savings apply here, just the current rules.

Who Is Affected?

New Homebuyers: Anyone buying a newly constructed home in Ontario.
Pre-construction Buyers: If you bought a condo or house that is not yet finished, you may qualify if the closing date is between April 1, 2026, and March 31, 2027.
First-Time Buyers: This group will benefit the most, as the lower price helps them enter the market more easily.
Resale Homebuyers: This change does not apply to resale (previously owned) homes, which are not subject to HST.

What You Should Do

If you are looking to buy a new build, here are three steps to take:

Check Your Closing Date: Talk to your builder or lawyer. Ensure your possession date is scheduled between April 1, 2026, and March 31, 2027. If you close a day early or late, you may miss out.
Recalculate Your Budget: Update your mortgage calculations. With the HST removed or reduced, your total purchase price will be lower. This may lower your monthly mortgage payments or allow you to afford a slightly better home.
Review Your Agreement: If you have already signed a purchase agreement, check the clauses regarding adjustments. You want to make sure you are not paying the HST upfront and waiting for a rebate later.

Bottom Line

The Ontario government is removing the 13% HST on new homes under $1 million for one year only (April 1, 2026 – March 31, 2027).

This can save buyers up to $130,000. If you are in the market for a new build, timing your purchase to close within this window could result in massive savings.