Ontario Drops HST on New Homes — And Ottawa Stands to Benefit
Ottawa homebuyers looking to get into the new construction market just caught a significant break. Premier Doug Ford announced Wednesday that Ontario will remove the full 13 per cent HST on newly built homes valued up to $1 million, effective April 1, 2026 through March 31, 2027.
The announcement was made at a news conference in Mississauga, and the implications are real for buyers and builders right across the province — including right here in the National Capital Region.
How Much Could Ottawa Buyers Actually Save?
On a $750,000 new build — not an unusual price point for a townhome or condo in Ottawa's suburban communities like Barrhaven, Kanata, or Orleans — a full 13 per cent HST removal translates to roughly $97,500 in tax savings. Even on a $500,000 entry-level new condo, that's $65,000 back in a buyer's pocket.
For context, the HST on new homes in Ontario is one of the most significant carrying costs buyers face at the time of purchase. Removing it entirely, even temporarily, is a substantial affordability measure.
Will It Actually Spur New Construction in Ottawa?
That's the billion-dollar question. The Ford government's stated goal is to stimulate housing supply by making new construction more attractive to both buyers and developers. If demand for new homes spikes during the 12-month window, the theory goes, builders will have stronger incentive to break ground on projects that have been sitting in the pipeline.
Ottawa has no shortage of those. Several large residential developments in the city's west end, south end, and along LRT corridors have faced financing and pre-sales hurdles in recent years. A surge in buyer interest could be the nudge some of those projects need to move forward.
At the same time, housing analysts have noted that one-year tax holidays can create a pull-forward effect — buyers who were going to purchase anyway accelerate their timelines, leading to a short-term bump without necessarily adding net new supply over the longer run.
What Counts as a 'New Home'?
The tax relief applies to newly constructed homes, including condos and purpose-built rental units, priced under $1 million. It does not apply to resale homes, which are already exempt from HST. Buyers of new homes priced above $1 million won't qualify.
In Ottawa's current market, that $1 million ceiling covers the vast majority of new townhomes, stacked units, and entry-level condos — though some larger single-detached builds in premium neighbourhoods may fall outside the threshold.
What Buyers Should Know Right Now
If you're in the market for a new build, this window is worth paying attention to. Closings typically happen months after a purchase agreement is signed, so timing matters — you'll want to understand how your builder is structuring agreements and whether your closing falls within the eligible period.
As always, work with a real estate lawyer who understands new construction contracts and HST rebate eligibility before signing anything.
Source: CBC Ottawa / CBC News. Original article: Ontario planning to remove HST on new homes for 1 year
