New-home tax break pulling buyers away from resale market in GTA

Ontario's new HST rebate on home purchases is reshaping the GTA's housing market — and it's working against sellers of resale homes.

The 13 per cent HST rebate, which came into effect April 1, offers buyers up to $130,000 off new homes priced up to $1.5 million. Two months in, the effect is clear: new single-family home sales surged above their 10-year April average, while the resale market stayed softer than normal for spring.

Wahi Economist Ryan McLaughlin analyzed May data across 303 GTA neighbourhoods and found only 7 per cent of homes sold above asking price — a 13 per cent drop from typical spring bidding wars. Meanwhile, 92 per cent of resale homes sold below asking, a sign of weak competition.

"The new incentive seems to be encouraging buyers to choose pre-construction properties over resale homes," McLaughlin told NOW Toronto. The timing matters: the rebate is scheduled to expire March 31, 2027, so buyers considering a new-build have about nine months to lock in the savings.

Experts caution that tax breaks shouldn't be the only driver of a purchase decision — long-term housing goals matter more. But for buyers shopping right now, the rebate is tilting the scale toward new construction, leaving resale sellers in a tougher position than they'd expect for this time of year.