TORONTO — New-home sales in Ontario surged in the second quarter after the provincial government temporarily removed the harmonized sales tax (HST) for eligible buyers, industry groups reported Tuesday.
Sharp sales gain tied to temporary rebate
Data compiled by the Building Industry and Land Development Association (BILD) and the Ontario Home Builders’ Association (OHBA) show sales of newly built homes rose 130 per cent year-over-year in the April-to-June period. In total, industry registrations recorded 8,410 new-home sales across the province during the quarter.
An economic analysis attached to the release concluded that the sale of 4,765 of those homes can be attributed directly to the expanded HST rebate program. That compares with 3,645 new homes sold in the same quarter of 2025.
“The impact of the HST is what really brought consumers off the sideline,” Scott Andison, chief executive officer of the OHBA, said Tuesday. “It just makes a significant difference in families being able to purchase the home that meets their needs.”
How the rebate works and its timeframe
The provincial government announced in March that it would remove the full 13 per cent HST for eligible buyers of new homes valued up to $1 million, offering a maximum rebate of $130,000. The rebate scales down for more expensive homes. The expanded program officially began on April 1, took full effect in late June and is scheduled to expire on March 31, 2027.
What builders and buyers are saying
Industry representatives say the tax change moved potential buyers who had been waiting on the sidelines to make purchases, helping clear inventory of newly constructed units. The groups portrayed the rebate as a decisive factor — particularly for families and first-time buyers assessing affordability.
Developers have in past months reported differing demand patterns across Ontario’s urban and rural markets. While the industry statement did not provide a geographic breakdown beyond the provincial totals, the rebate’s ceiling and its interaction with local prices mean the effect will vary by community — with buyers in lower-priced markets more likely to reach the full benefit.
Practical implications for buyers and market watchers
Market observers say temporary policy incentives can accelerate buying decisions but also risk shifting demand forward in time, producing short-term booms followed by slower periods once incentives end. Homebuyers should consider:
- Eligibility rules for the HST rebate and whether their purchase price allows them to receive the full amount;
- Timing of contracts and completions — registrations and sales in Q2 include transactions contracted as the rebate became available;
- Longer-term affordability, including mortgage rates, property taxes and carrying costs after the purchase.
| Measure | Q2 2026 | Q2 2025 |
|---|---|---|
| New-home sales (total) | 8,410 | 3,645 |
| Sales attributed to rebate | 4,765 | N/A |
| Year-over-year change | +130% | - |
Wider market context
While the industry groups highlighted the immediate lift from the policy change, broader market dynamics remain in play. Mortgage rates, regional supply constraints, and local zoning and construction capacity will continue to shape where and how quickly new housing can be delivered.
For many Ontarians, especially in and around Toronto where housing costs remain high, the rebate may make certain new-home purchases feasible that were previously unaffordable — but only up to the program’s eligibility thresholds. Buyers in lower-cost communities are more likely to fully benefit from the change, while purchasers in pricier markets may receive a reduced rebate or none at all if their purchase price exceeds the program cap.
Industry leaders say the rebound shows the sensitivity of demand to tax and incentive policy. Provincial policymakers will be watching sales trends in the coming quarters to assess whether the surge represents a permanent lift in underlying demand or a temporary acceleration tied to the program’s deadline.
As the rebate runs through March 2027, builders, buyers and municipal planners will be monitoring sales and completions for signs of how the policy reshapes housing availability across Ontario’s urban and rural communities.
Ryan Kowalski is WE NEWS’ Ontario correspondent, reporting on housing, development and the province’s urban-rural balance.
