Buying a home in Ontario might finally become a little less painful for your wallet.
In a major housing affordability push, the government of Ontario is planning to remove the 13% HST on new homes priced up to $1 million, potentially allowing buyers to save as much as $130,000 on their purchase.
The policy, introduced under Premier Doug Ford, is designed to make home ownership more accessible while also stimulating construction across the province.
For buyers in cities like London, Ontario, where new housing developments and pre-construction projects are expanding rapidly, this tax change could significantly reduce the overall cost of purchasing a new property.
What Is the New HST Rule?
Ontario’s proposed policy removes the 13% Harmonized Sales Tax (HST) on newly built homes priced up to $1 million.
Previously, tax relief programs mainly focused on first-time home buyers, leaving many upgrade buyers and investors without significant benefits. The new version expands eligibility much further.
Key Highlights
- 13% HST removed on qualifying new homes
- Applies to new construction and pre-construction properties
- Expanded eligibility, not limited to first-time buyers
- Designed to boost housing supply and affordability
This change is part of broader Ontario housing tax changes planned for 2026.
Timeline: When the Policy Applies
The HST removal is expected to apply to purchases made within a specific one-year window.
Proposed timeframe:
April 1, 2026 → March 31, 2027
To qualify, buyers typically must:
- Sign the purchase agreement during this period
- Meet construction and occupancy deadlines
- Ensure the property meets eligibility rules
Because this is a limited-time policy window, many real estate analysts expect increased demand for new homes during 2026.
How Much Can You Actually Save?
The savings depend on the home price, but the numbers can be substantial.
| Home Price | HST (13%) | Potential Savings |
| $600,000 | $78,000 | $78,000 |
| $800,000 | $104,000 | $104,000 |
| $1,000,000 | $130,000 | $130,000 |
For many buyers, this reduction alone could cover:
- Most closing costs
- Several years of property taxes
- Major renovations or furnishing
This is why the policy is gaining attention among people researching new home tax savings in Ontario.
What’s Changed? (All eligible buyers, not only first-time buyers)
The biggest shift is who can benefit.
Before
- Mostly limited to first-time home buyers
- Smaller rebates
- More restrictions
Now
- All eligible buyers may qualify
- Applies to upgrade buyers
- May apply to investors purchasing rental properties
This expansion is why searches for HST rebate Ontario new homes and HST rebate investment property Ontario are increasing.
Key Conditions to Qualify
Not every purchase will automatically qualify. Buyers must meet several criteria.
1. Purchase Within the Window
The purchase agreement must be signed between April 2026 and March 2027.
2. Property Type
The home must be:
- A new construction property
- A pre-construction home
- Purchased from a builder or developer
3. Use of Property
Typically, the property must be either:
- Primary residence, or
- Long-term rental property
The rules distinguishing primary residence vs rental tax treatment can affect eligibility and future tax reporting.
4. Construction Deadlines
Builders must meet completion timelines set by the program.
Failure to meet deadlines could impact eligibility for the HST rebate Canada new construction programs.
Why Is Ontario Doing This?
The policy is part of a larger housing and economic strategy.
The government led by Doug Ford says the goal is to:
- Improve housing affordability
- Encourage new home construction
- Stimulate the local economy
Officials expect the program could generate:
- 8,000 new homes
- 21,000 jobs across construction and related sectors
Reducing taxes on new construction also helps builders move forward with projects that may have stalled due to high costs.
Smart Moves for Buyers in 2026
If you’re considering buying a new home in Ontario, the policy could change your strategy.
1. Evaluate Pre-Construction Deals
Pre-construction homes may see the biggest benefit because the tax savings apply before final closing.
2. Compare New vs Resale Homes
Since the HST removal only applies to new builds, it may shift the value equation compared to resale homes.
3. Plan Financing Early
Banks will likely factor these savings into mortgage affordability calculations.
Many buyers researching cost of buying new home Ontario may discover that a new build becomes surprisingly competitive with resale properties.
Tax Implications You Shouldn’t Ignore
While the savings are attractive, buyers should still think about long-term tax implications.
Closing Cost Impact
The removal of HST reduces upfront purchase costs, but buyers still need to account for:
- Land transfer tax
- Legal fees
- Mortgage insurance
Rental Property Considerations
If the home is used as a rental property:
- Rental income will be taxable
- Depreciation rules may apply
- HST rebate eligibility may differ
Long-Term Tax Planning
Real estate purchases can affect:
- Capital gains tax
- Income reporting
- Estate planning
This is especially important for investors and high-income buyers.
Also read: Who qualifies for Lifetime Capital Gains Exemptions?
How an Accounting Firm in London, Ontario Can Help?
Buying property involves more than just choosing a house, it requires careful financial planning.
An experienced accounting firm in London, Ontario can help you:
- Understand HST rebate eligibility Ontario
- Plan tax-efficient property purchases
- Structure rental property ownership
- Optimize long-term real estate tax strategy
With housing policies evolving quickly, professional tax guidance ensures you maximize every available benefit.
Honest Take
Ontario’s plan to remove the 13% HST on new homes could save buyers up to $130,000, making 2026 a potentially strategic time to purchase new construction property.
However, eligibility rules, timelines, and tax implications mean buyers should plan carefully before making a decision.
For professional tax & accounting, feel free to get in touch with MultiTaxServices
