Ottawa buyers who missed new HST rebate question fairness as policy takes effect

The HST rebate could save homeowners hundreds of thousands of dollars, but those who missed out say it’s not a fair deal. CTV’s Tyler Fleming reports.

An Ottawa couple says missing a new government tax break on the purchase of their new home by a matter of weeks is costing them tens of thousands of dollars and raising questions about fairness for buyers caught on the wrong side of the cutoff fence.

Jalil Abouali and his partner Whitney signed the papers and put a deposit on a new construction home in Embrun, Ont. in February, before federal and provincial governments announced a plan to eliminate the HST on new homes starting April 1.

• Buying a new build home? Say bye to the HST

“We found a modest three-bedroom home but it was still a lot of money for us,” said Abouali.

“Yes, we were happy with the house, but that still doesn’t mean it was totally affordable. It’s a difficult housing situation these days. It’s very expensive to buy a home.”

The policy amounts to a 13 per cent rebate on homes valued up to $1 million, savings that can reach $130,000.

For Abouali, the timing, buying eight weeks ahead of the HST rebate enactment, has been difficult to accept.

“This a very tough pill to swallow and it’s given me a lot of sleepless nights,” he said.

“Now, my neighbor could close on the house the same week as me and I’m just using hypothetical numbers, but they could have a home of the exact same style and property for, let’s say, $80,000 less.”

Abouali says the financial impact feels arbitrary, especially since the couple has not yet moved into the home.

The couple says they have contacted multiple elected officials and are calling for a solution, such as a grace period or phased approach for buyers who signed shortly before the cutoff.

“It may not mean anything to them, but for myself, for my family, this is a lot of money to be missing out on,” he said.

“If it’s truly about affordability, they’ll offer a solution because there are a lot of people who are in some precarious situation and this is just not fair for them financially.”

CTV News Ottawa reached out to both the federal and provincial governments asking if changes could be considered.

A statement from the office of Ontario’s Minister of Finance reiterated the plan to “help more individuals and families achieve the dream of home ownership and spur new home construction,” adding the HST rebate will support thousands of jobs and billion of dollars in growth, while also “providing relief to hardworking Ontario families on one of the biggest financial transactions of their lives.”

It did not address Abouali’s concerns.

Industry groups say the rebate aimed at improving affordability and boosting housing supply is already changing buyer behaviour.

Scott Andison, chief executive of the Ontario Home Builders’ Association, says the rebate is already driving results, as builders have reported a surge in interest since the announcement.

“Builders saw a significant increase in traffic in their presentation and sales centres,” Andison said, adding the rebate applies not only to pre-construction homes but also to existing inventory. He says the policy is also prompting some developers to revive stalled projects.

“This is exactly the type of activity we were hoping to see,” said Andison.

“It’s getting people out and looking at opportunities for new homes and there’s a whole trickle down effect for families who move up into larger homes because their family is growing and their incomes have grown. Then that leaves whatever they’re leaving, whether it be a rental or resale, open for somebody else. This is the effect within the market that is helpful for everyone.”

Overall housing starts in Ottawa and across the country have been slower than in years past. Real estate experts say it is too early to determine how the rebate will affect the broader market, including resale prices.

“The resale market and the new build market have always been closely intertwined, yet very different,” says Tyler Posadovski, an agent with Walker Real Estate Group RE/MAX.

“With resale, the timelines can be more flexible and you can buy something where a lot of the post-closing updates have already been done and you don’t have to pay for those out-of-pocket yourself.”

He says buyers should focus on long-term value rather than short-term shifts.

“Keep your eyes on the horizon,” says Posadovski. “Real estate is a long-term game and your home will go up in value.”

The HST rebate will be available for one year, with first-time buyers eligible for purchases made on or after March 20, 2025.

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