Homebuilders in Ontario are growing “frustrated” with the slow rollout of the HST rebate on newly constructed homes in the province, even as the policy appears to be convincing a growing number of buyers to purchase a new house.
In late-March, the Ford government said it would spend $1.4 billion to expand the homebuyers tax credit, allowing anyone to buy a pre-construction house or condo tax-free.
The federal government agreed to mirror the policy for Ontario homebuyers, offering a 13 per cent discount on homes up to $1 million, giving buyers access to a $130,000 tax break for a 12-month period.
Already, the building industry said, sales have been rapidly rising with 1,100 sales of single-family homes and condos since April, representing a 185 per cent increase compared to the same time in 2025.
“Particularly on the low-rise side, there are substantial increases,” said Dave Wilkes with the Building Industry and Land Development Association. “So we are seeing that trend.”
The development industry, along with the Ford government, however, appears to be getting increasingly anxious over the rollout of the rebate — placing the blame at the feet of the federal government.
Get daily National news
While Ontario has decided to waive the eight per cent provincial portion of the HST on new builds, the remaining five per cent charged by the federal government is still in question.
The province asked the federal government to rebate that portion through the Canada Revenue Agency — a method that requires federal regulations to be enacted, with no timeline on when the step will be taken.
“We’re waiting on them patiently, maybe not so patiently,” said Housing Minister Rob Flack. “Every day is a wasted day, so we’re asking them to hurry up and get it done.”
The pressure is being echoed by the development industry, concerned that a lack of clarity could slow down momentum.
“Frustrated is the bottom line,” Wilkes said. “We continue to call for the clarity around how the mechanism will work for both the federal and provincial portions of the HST so that people can purchase with confidence, understanding how that’s gonna flow through.”
- BYD confirms Canadian launch in late 2026, plans to build over 20 dealerships
- Canada’s big banks brace for more bad loans, focus on ‘de-risking’
- No Pathways, no pipeline: How Alberta’s massive carbon storage project would work, if built
- Canada signs LNG deal with Germany, the 1st with a European buyer
“This needs to be cleaned up as quickly as possible.”
Federal sources, speaking on background, told Global News that while Ottawa agreed to send Ontario $875 million to make up for its share of the policy, the province later asked the federal government to distribute the five per cent HST rebate through the Canada Revenue Agency.
That process, sources said, is subject to specific steps and waiting periods, which might be contributing to the delay.
Those regulations are in the final stages and could be introduced “soon,” according to one official.
At Queen’s Park, critics accused the Ford government of dragging its heels.
“There ought to have been ample time for them to have done their homework, had the conversations with the federal government and Canada Revenue Agency,” said Ontario Liberal MPP Adil Shamji.
The risk, Shamji said, is that potential homebuyers will continue to “sit on the sidelines” as they await details from the province.
The province, while impatient, doesn’t appear to be bothered.
Comments
Want to discuss? Please read our Commenting Policy first.