Ontario home buyers to be eligible for HST rebate on all new homes

Ottawa homebuilders are welcoming the federal and provincial governments’ plans to scrap the HST on all new homes. CTV’s Austin Lee reports.

Premier Doug Ford was in Mississauga Wednesday morning announcing a plan from the provincial and federal governments to temporarily expand the HST rebate on new homes in Ontario to allow all buyers to tap into savings.

The HST rebate on new homes was previously only available to first-time homebuyers under the federal GST/HST First-Time Home Buyers Rebate.

It means homebuyers can get a tax break of up to $130,000 on a home worth up to $1 million. This extension of the rebate will be available starting in April and it will remain in place until the end of March 2027 pending the “passage of federal legislation,” according to the province.

To bring the plan to fruition, the province will cover its eight per cent portion of the HST, while the federal government is set to take on its five per cent portion.

“Today’s announcement is made possible, in part, because of our partnership with the federal government which is cost sharing with us in support of provincial housing initiatives,” said Ford.

“I want to thank the Prime Minister. Prime Minister Carney is a great partner, and I just appreciate him doing this. This is going to make a massive, massive difference.”

The province says homes valued up to $1.5 million would be eligible for a maximum rebate of $130,000.

The plan is expected to cost Ontario $1.4 billion, according to government officials.

Jason Burggraaf, the executive director of the Greater Ottawa Home Builders’ Association, is excited about what the announcement means for the housing sector in the Capital Region.

“This is the most significant announcement for housing affordability that any level of government could make,” he said.

“Most of the construction we’ve seen in the past year has been for-purpose rental, which we definitely need, but when you have lowering activity in new home sales, that really puts a dampening pressure on the entire market overall.”

Burggraaf adds Ottawa saw about 3,000 new home sales last year. He says he hopes to see that number double this year, and he believes achieving that goal is reasonable, especially considering Wednesday’s announcement.

“Hopefully, this tax rebate now is the inducement for people who have been waiting on the sidelines,” Burggraaf said.

“Both levels of government have been talking about getting this tax rebate on the go for about a year or longer. Now, that rebate is here.”

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The premier is hoping the move will also spark a boost in new housing starts, creating jobs and economic growth for the province.

“This rebate will deliver nearly $2.2 billion in tax relief, kickstart the construction of 8,000 additional homes, support up to 21,000 jobs, boost Ontario’s GDP by up to $2.7 billion and bring the dream of home ownership in reach,” Ford said.

“My message to everyone from the building sector here today is very simple, start building.”

While the rebate only applies to new homes, Burggraaf says the ripple effect of the plan is expected to be felt across the entire market.

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“Say someone is in a townhome now, they can’t necessarily afford to move up into a bigger home for their growing family. Now, they’ll be able to afford that bigger home. They move out of that one and that frees up their townhome for say the person who is living in an apartment or that first-time buyer,” he said.

“As we’re adding to the new housing supply, it’s really providing more housing options for everyone up and down the spectrum.”

While many people are welcoming the plan, there is still an appetite to help those looking to enter the market.

“Obviously, there is a huge housing crisis right now and I do applaud the provincial and federal governments are recognizing this,” said Cindy Cutts.

“But I would love to see more tax incentives or breaks for first-time home buyers. Not just on new homes.”