The Ontario government has announced a major new housing incentive designed to make homeownership more affordable for first-time buyers.
Under the proposal, first-time home buyers purchasing a new home valued up to $1 million would receive a rebate of the full 8% provincial portion of the HST. When combined with the federal government’s proposed removal of its 5% portion of the HST, the total savings could reach up to $130,000 on the purchase of a new home.
- Ontario rebate: up to $80,000
- Federal rebate: up to $50,000
Eligibility
- Must be a first-time home buyer.
- Applies to newly built or substantially renovated homes valued up to $1 million.
- For homes priced between $1 million and $1.5 million, the rebate will be gradually reduced, with a minimum rebate of $24,000 for homes up to $1.5 million.
- The buyer must intend to occupy the home as their primary residence.
Timing
- Applies to agreements of purchase and sale entered into between May 27, 2025, and 2031.
- Construction must begin before 2031 and be substantially completed before 2036.
How It Works
This new rebate is in addition to Ontario’s existing HST New Housing Rebate, which already provides up to $24,000 in relief. Together, the two rebates would eliminate the entire 8% provincial portion of the HST on qualifying new homes valued up to $1 million.
Awaiting Legislation
Both the Federal and Provincial governments need to pass the necessary legislation to bring this proposal into effect.
Brian Madigan, LL.B., Broker
www.OntarioRealEstateSource.com