Ottawa home sales centres busy as HST rebate for new builds kicks in

An HST rebate on new homes went into effect in Ontario April 1, providing relief for first-time homebuyers. CTV’s Natalie van Rooy reports.

Rebates for new home buyers went into effect on April 1, slashing the 13 per cent harmonized sales tax (HST) on Ontario new builds.

Home sales centres were busy on Saturday in the national capital region with hopeful buyers looking to cash in on the savings.

Rakesh Arunachalam is looking for a new home for his family and says not having to pay HST is a game changer.

• All Ontario buyers will be eligible for HST rebate on new homes for one year, Ford says

“We are going to get HST relief, so it’s a good thing for the first-time home buyers and I think it will help us a lot to afford a home,” Arunachalam told CTV News Ottawa.

He says the rebate changed the way he is searching for a home altogether.

“We are looking at a new build after the HST rebate, so it would be more affordable to get a house,” he said.

“Before that, we were trying to get the old or the used houses.”

Eligible buyers in Ontario will no longer have to pay HST on new homes valued up to $1 million for a maximum rebate of $130,000.

New builds between $1 million and $1.5 million are eligible for a maximum rebate of $130,000.

“I think this rebate is probably one of the largest incentives that we’ve seen in the housing market in years,” said Tyler Posadovsky, a real estate agent at Remax Absolute Walker Realty.

“I think it creates a lot of opportunities for people that have been on the sidelines.”

The tax relief measure will expire on March 31, 2027.

“That could be extended depending on what happens, but I think it’s good news for builders,” said Frank Napolitano, a mortgage broker in Ottawa.

“I think it’s good news for first time homebuyers and I think it’s good news for anyone that may want to upgrade, maybe from a smaller house to a bigger house or maybe even downgrade.”

It’s not clear how the rebate will affect the market, including for older homes up for sale, but Napolitano says the change will help people qualify for a mortgage.

“I’ve had a couple of them already where the starting price was $600,000, but all the sudden it’s enough because after the rebate, it’s in the low fives, so qualifying is much easier.”

As the search continues for Arunachalam and his family, he’s feeling hopeful for what’s in store for the spring housing market.

“I would say the 13 per cent would make a large difference for the people who are trying to get a home,” he said.

For new builds, there’s also development charges to keep in mind.

In Ottawa, the one-time development fee on a single-detached and semi-detached property ranges from about $45,000 to $55,000, depending on where in the city it’s located.

The provincial government has said it is committed to reducing those fees by up to half for three years.

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