HST removal triggers 130% surge in new home sales across Ontario in spring quarter
A temporary expansion of the harmonized sales tax rebate for eligible new homes sparked a dramatic spike in sales during the second quarter, industry groups report.
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New home sales in Ontario jumped 130 percent year-over-year in the second quarter, with industry groups crediting a temporary expansion of the harmonized sales tax rebate for eligible buyers.
The Building Industry and Land Development Association and Ontario Home Builders' Association reported that 8,410 new homes sold in Ontario during Q2. Of those, 4,765 sales were directly attributable to the expanded HST rebate program — a significant jump from 3,645 new homes sold in the same quarter last year.
The rebate program, which began April 1 and took full effect in late June, removes the full 13 percent HST for eligible buyers of new homes valued up to $1 million, offering a maximum rebate of $130,000. The rebate gradually declines for more expensive homes and will end March 31, 2027.
"The impact of the HST is what really brought consumers off the sideline," said Scott Andison, CEO of the OHBA. "It just makes a significant difference in families being able to purchase the home that meets their needs." He noted the change has made a difference for affordability, bringing down prices for individual families, and protecting jobs in Ontario's home building and renovation sectors.
Not everyone is convinced the numbers tell the full story. Toronto broker David Fleming questioned the data, noting that while home sales more than doubled in the second quarter, they did so from a historic low and remain significantly below the spring 2022 peak. "I have not had a single person contact me and use the word HST," Fleming said. "We have to take it with a grain of salt because, of course, BILD is going to say that sales are happening."
The Ontario Finance Ministry said the government remains committed to making home ownership more affordable through measures designed to reduce the time and cost of building.
How many of these sales would have proceeded without the HST rebate, and what does that suggest about artificial demand?
What happens to the market when the rebate expires on March 31, 2027?
We'll update this story as answers emerge.
The facts
How many new homes sold in Ontario during the second quarter of 2026?
Ontario recorded 8,410 new home sales in Q2 2026, according to the Building Industry and Land Development Association and Ontario Home Builders' Association.
When does the expanded HST rebate program end?
The expanded harmonized sales tax rebate program ends on March 31, 2027.
What is the maximum HST rebate available for eligible new home buyers?
Eligible buyers of new homes valued up to $1 million can receive a maximum rebate of $130,000, which represents the full 13 percent HST.
How many of Ontario's Q2 new home sales were attributed to the HST rebate?
Of the 8,410 new homes sold in Ontario during Q2 2026, 4,765 sales were directly attributable to the expanded HST rebate program.
