‘It’s going to be a huge stimulus to the home market’: Housing industry leaders applaud expanded HST rebate program on new homes

CTV London’s Bryan Bicknell with local reaction to the announcement of an HST rebate on new homes worth $1 million or less.

It’s one of the largest purchases many of us will make in our lifetimes.

Now, the cost of a newly built home is about to get a whole lot cheaper – and according to Jared Zaifman, CEO of the London Home Builders Association – it can’t come soon enough.

“Well, it’s really something we’ve been advocating for a long time. Our expectations, it’s going to be a huge stimulus to the home market right now,” Zaifman said.

The province has announced a new federal-provincial program to temporarily expand the HST rebate for new homes, allowing all buyers a tax rebate of up to $130,000 for a one-year period.

Ontario Premier Doug Ford made the announcement Wednesday in Mississauga.

“We will be rebating the full HST for all new homes, no matter if you’re a first-time buyer or second, or a 10-time buyer, you’re getting the HST deducted valued at one million or less,” Ford said.

A reduced rebate would be available for new homes valued between $1.5 million and $1.8 million and new homes above $1.85 million would qualify for $24,000 in HST relief under the pre-existing rebate.

The province will cover eight per cent, the provincial portion of the HST, while Ottawa will cover the federal portion of five per cent.

Robin Tiller, chair of the London St. Thomas Realtors Association, says it opens the market to those sitting on the fence about buying a home, or those ready to scale down.

“We are hoping that maybe down-sizers will take advantage of it, maybe move into something that’s a little more suitable for their needs. That will open up and free family space for other families. We are hoping that the trickle-down effect of this is going to shift our market, because we have a lot of development sitting, waiting for the market to pick up,” said Tiller.

Previously the HST rebate was only available to first-time homebuyers under a federal-provincial program. But according to the Home Builders Association, they only make up about five percent of all homebuyers.

“We’ve been sort of expecting that if nothing changes, there’s going to be severe consequences in the local economy. So, this could be a huge reversal of what that’s going to look like for our industry over the next number of months this year,” Zaifman explained.

Ford says the expanded rebate program will kick-start the construction of 8,000 additional homes. In addition, it will “support up to 21,000 jobs, boost Ontario’s GDP by up to $2.7 billion, and bring the dream of homeownership in reach for thousands of Ontario families.”

The expanded HST rebate for new homes program begins April 1.