Great news for first-time homebuyers in Ontario!
Both the Government of Canada and the Province of Ontario have announced major changes to the HST on new homes, dramatically reducing the cost of buying new construction.
Together, these two rebates mean that qualifying buyers can now receive a full refund on the entire 13% HST for homes priced up to $1 million — saving tens of thousands of dollars and making home ownership more attainable than it’s been in years.
🏡 What’s Changed
1️⃣ Federal Rebate (New in 2025)
The federal government will now provide a 100% rebate on the 5% federal portion of the HST for new homes up to $1 million.
- The rebate phases out gradually between $1 million and $1.5 million.
- For eligible buyers (particularly first-time buyers), that’s up to $50,000 in savings on the federal side alone.
2️⃣ Ontario Provincial Rebate (Announced October 28, 2025)
The Province of Ontario is removing the entire 8% provincial portion of the HST on new homes up to $1 million, with a gradual phase-out above that threshold.
Previously, only a partial rebate was available — but now, the full 8% provincial tax will be rebated, representing the largest provincial housing tax reduction in over a decade.
💰 Example: A $600,000 New Townhome
Here’s how the numbers break down for a $600,000 new-build townhome:
- Total HST (13%) = $78,000
- Federal rebate (5%) = $30,000
- Ontario rebate (8%) = $48,000
✅ Total savings: $78,000
That means a qualifying first-time buyer would pay no HST at all on that purchase — saving enough to cover closing costs, upgrades, or even reduce mortgage borrowing.
🧭 Why This Matters
For years, new construction homes in Ontario have been out of reach for many families due to high prices and added taxes. These dual rebates directly tackle that problem, especially for first-time buyers who have struggled with affordability.
This combined effort will:
- Reduce the upfront cost of homeownership
- Encourage new housing development
- Stimulate construction jobs and economic growth
With affordability top of mind, this policy shift marks one of the biggest changes to housing taxation in recent memory.
📊 What Buyers Should Do Now
If you’re planning to buy a new home or pre-construction unit, here’s what to do next:
- Confirm your eligibility — rebates apply primarily to new builds under $1M, with phase-outs up to $1.5M.
- Talk to your lender — the reduced taxes could improve your debt-to-income ratio and qualifying amount.
- Review builder contracts — ensure the rebate is properly applied at closing.
- Work with an experienced REALTOR® who can help you identify qualifying projects and navigate the rebate paperwork.
✉️ Final Thoughts
Between the federal and provincial HST rebates, new homebuyers in Ontario could now save up to 13% of the purchase price — a complete rebate on what used to be a major cost barrier.
If you’re a first-time buyer, this change could mean the difference between “someday” and “today.”
📞 Chad Featherstone | REALTOR®
Helping you find the right home — and the right savings.
