Ontario Is Removing HST on ALL Pre-Construction — Here's What That Means for Your Portfolio
If you've been waiting for a meaningful catalyst to move the Ontario pre-construction market, this is it. Premier Doug Ford has just announced that Ontario will eliminate the full 13% HST on new homes valued up to $1 million - and this time, it’s not just for first-time buyers but all buyers! As a real estate investor, this just make the financials work again.
What Was Just Announced
At a news conference in Mississauga, Ford announced that the full 13% HST (including the 8% provincial portion and the 5% federal portion) will be removed for new homes valued up to $1 million, effective April 1, 2026 through March 31, 2027. The rebate scales for homes valued up to $1.85 million.
This is a dramatic expansion of what Ontario tried before. The initial policy, introduced in late 2025, only covered first-time buyers and cost the treasury roughly $470 million over three years. But Ford himself admitted it "didn't move the needle." which is not surprising because first-time home buyers have traditionally made up only 5% of pre-construction buyers. The province has now gone all-in: the expanded program is estimated to cost around $2 billion which is a sign that the government is treating this as a genuine market intervention, not just optics. This will move the needle.
Rebate Overview
Full 13% HST rebate (5% federal, 8% provincial) up to $130,000
All buyers including investors (not just first-time home buyers)
Property value up to $1M, phased up to $1.85M
Purchase agreement signed between April 1, 2026 and March 31, 2027
Construction started before January 1, 2029
Construction completed by December 31, 2031
“I have always been an advocate of getting rid of the HST for everyone. We did it for first-time homebuyers, but obviously that didn’t move the needle, which I predicted it wouldn’t. Let’s open it up to anyone who wants to buy a new home.”
The Numbers Investors Need to Know
Why This Is Bigger Than the Headlines Suggest
Ontario's housing market is in crisis mode as I reported here. In the first quarter of 2025, housing starts hit their lowest level since 2009 - only 12,700 units. Toronto alone posted a 58% year-over-year decline in starts and a staggering 91% drop in sales compared to recent averages. Developers have been sitting on stalled projects. The pre-construction condo market, the backbone of investor activity in this province, has frozen.
The HST has long been one of the most-cited structural barriers to new home affordability in Ontario. Taxes, development fees, and carrying costs can add hundreds of thousands of dollars to the cost of a newly built home which can price out the very buyers who drive pre-construction sales. Removing the HST entirely is the most significant demand-side stimulus the province has introduced in years.
The Investor Opportunity in Plain Terms
A $130,000 cost reduction on a $1M condo doesn't just help end-buyers - it gives developers the opportunity to move completed inventory, speeds up construction timelines, and creates renewed urgency in a market that's been stagnant for 18 months.
What This Means If You're Looking to Buy New Construction
The case for buying a new construction condo or townhome under $1M just got dramatically stronger. You're essentially receiving a government-funded discount of up to $130,000 on your new home purchase. This is a limited time offer with the discount set to expire in 12 months.
The province projects this program could stimulate an additional 8,000 housing starts and support up to 21,000 jobs. More starts mean more inventory coming to market but the demand spike may arrive before supply catches up, which historically creates appreciation pressure in the near term.
The Broader Context: A Market Looking for a Floor
Ontario's pre-construction market has been plagued by sluggish sentiment, rising carrying costs, and waning investor confidence. The government's own data shows only 62,561 new housing starts in 2025 which is well below the pace needed to hit the province's target of 1.5 million homes by 2031. Builders have warned that declining sales represent an existential threat to construction employment and long-term housing supply.
This policy is the province's most direct attempt yet to put a floor under that market. It's also a signal that Ford's government understands the limited policy levers it removed by committing to never raise taxes - stimulus now has to come through tax reduction rather than spending.
One Thing to Watch
Critics like Mike Schreiner of the Ontario Greens argue that land transfer taxes and development charges (which can add up to $140,000 on their own) remain untouched. The HST removal is significant, but it doesn't eliminate every cost premium in new construction. Smart investors will model the full cost, not just the HST line.
Bottom Line
Ontario's decision to remove HST for all new home buyers is the kind of structural policy shift that creates real windows of opportunity for investors who move quickly and think clearly. The market has been starved of demand catalysts. This is a real one. Whether you're holding, buying, or selling, the next 12 months in Ontario new construction deserves your full attention.
If you want to discuss how this affects your portfolio, reach out.
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Kyle Dovigi
Real Estate Broker | CondoMillionaire.com
Anyone can become a Condo Millionaire - it all starts with one.
Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or tax advice. Rebate eligibility, timelines, and final legislative details are subject to change pending passage of provincial and federal legislation. Always consult a qualified real estate lawyer, accountant, or financial advisor before making investment decisions.
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