Ontario's $130,000 HST rebate on new homes — the deadlines nobody reads

The biggest single cheque available to a Toronto home buyer right now isn't a down payment program. It's a sales tax rebate on new construction worth as much as $130,000 — and the window to qualify closes on March 31, 2027.

It's already moved the market. Ontario recorded 8,410 new home sales in the second quarter of 2026, up 130% from 3,645 a year earlier, according to figures released by BILD and the Ontario Home Builders' Association. Of those, 4,765 sales were attributed to the rebate by the report's author. That's a real number of families — and also a reason to read the eligibility rules carefully rather than the headline.

This is general information, not financial, tax, or legal advice. Confirm your own eligibility with a lawyer or tax professional before you sign anything.

What the rebate actually pays

Ontario announced the enhanced rebate on March 25, 2026. It applies to eligible buyers of new homes — not only first-time buyers — on a sliding scale:

• Up to $1,000,000 — the full 13% HST is rebated.
• $1,000,001 to $1,500,000 — a flat $130,000.
• $1,500,001 to $1,850,000 — a declining amount, from $130,000 down to $24,000.
• Over $1,850,000 — the pre-existing $24,000 provincial reduction.

Separately, first-time buyers may qualify for federal and provincial first-time-buyer rebates with a March 20, 2025 effective date, on agreements signed through the end of 2030.

The deadlines are the whole game

Here is the part that gets skipped. To be a "qualifying new home" bought as a primary residence, all three of these have to hold:

• The agreement of purchase and sale is signed between April 1, 2026 and March 31, 2027.
• Construction begins on or before December 31, 2028.
• Construction is substantially completed on or before December 31, 2031.

You control the first one. You control neither of the others.

A rebate conditional on your builder breaking ground by a certain year is a rebate you are partly betting on someone else's balance sheet.

There is a second, narrower category for new homes bought as residential rental property where construction began before March 31, 2026, with substantial completion required by December 31, 2029.

One more caveat worth carrying: the rebate requires amendments to the federal Excise Tax Act, and the federal portion of the relief has been described as agreed in principle rather than legislated. Treat the federal 5% component as contingent until your lawyer confirms otherwise.

Why the money went to houses, not condos

The rebate did not lift the market evenly. Single-family and detached new home sales reached 7,215 units in Q2, running roughly 15% above the ten-year average for the quarter. New condo apartment sales came in at 1,195 units — an improvement on a terrible year, but reportedly still far below the ten-year norm.

That split makes sense once you look at who buys each product. A rebate that saves a buyer real money on a $900,000 detached home in the 905 is decisive. A rebate on a small downtown condo doesn't fix the problem that condos have gone a decade without appreciating and that the resale market is currently falling in price while competition tightens. The tax break changes the purchase price. It doesn't change the pipeline.

What to check before you sign

The rebate makes new construction the cheapest-looking option on the shelf. That's exactly when due diligence gets skipped.

• Verify the project is actually moving. Pull the permit history for the site. A project with no building permit activity is a project that has to break ground by the end of 2028 for you to keep your rebate.
• Look at what else is coming. Nearby development applications tell you how many competing units could complete around you — and whether the block is a construction zone for the next five years.
• Price the carrying cost, not the sticker. Run the property tax estimate and remember the rebate is a one-time event; taxes, fees, and interest are monthly.
• Read the site's record. Open orders and bylaw investigations on a development site are cheap to check and occasionally very informative.
• Know what you don't get told. Much of a property's history a seller doesn't have to disclose.

If you're working out whether the purchase clears your budget in the first place, our sister site Metrestick covers the personal-finance side of the same decision — down payment, carrying costs, and what a rebate does and doesn't do to the monthly number.

A discount is not a diligence pass

Run the property snapshot on any address or development site before you sign, then turn on monitoring so permits, orders, and new applications reach you while you're still deciding. A $130,000 rebate is worth having. It's worth even more on a project that gets built.