Ontario’s new HST rebate for newly built homes is already starting to affect the Greater Toronto Area real estate market.
Just over two months after the rebate was announced, the early results are noticeable. New construction houses have seen a strong increase in activity, while the condo market remains much slower. For buyers, investors, and anyone thinking about making a move in the GTA, this rebate could make a meaningful difference — but it depends heavily on the type of property, the price point, and how each builder applies the rebate.
The New Home Market Is Not Moving as One Market
The GTA housing market is currently split into two very different stories.
On one side, new single-family homes are gaining momentum. In April, new single-family home sales in the Toronto region reached 901 sales, which was roughly triple the volume from the same period last year. That suggests the rebate is helping bring some buyers back to the new home market, especially where prices are now closer to resale alternatives.
On the other side, condos are still facing serious challenges.
Condo leasing demand remains strong, which shows that people still want to live in the Greater Toronto and Hamilton Area. However, resale condo sales are near some of the lowest levels seen in about a decade. Pre-construction condo sales have also struggled, with Q1 sales reaching a 35-year low.
This matters because it shows that demand for housing has not disappeared. Instead, buyers are being much more cautious about price, value, and monthly carrying costs.
Condo Inventory Has Reached a Concerning Level
One of the biggest issues in the condo market is inventory.
In Q1 2026, total unsold new condo inventory reached 19,608 units. There were also about 4,300 newly completed but unsold condo units, which works out to roughly 92 months of completed new condo supply.
That is about seven and a half years of inventory.
For context, a balanced or slower resale condo market in Toronto might have several months of inventory. A very hot market can have only one or two months. Seven and a half years is an unusually high amount of supply.
This large inventory level puts pressure on builders and sellers. It also gives buyers more options and more negotiating power, especially when looking at completed units that developers want to move.
New Condos Are Still More Expensive Than Resale Condos
Price remains one of the main reasons condos have not recovered as quickly as houses.
The average asking price for newly completed condos is just under $1,200 per square foot. That is down about 5% from last year and roughly 30% from the peak three years ago.
Even with that decline, new condos are still much more expensive than resale condos. The average resale condo price in the GTHA is around $859 per square foot. That means buyers are still looking at a large premium for a brand-new unit. The HST rebate helps narrow that gap. In some cases, the effective price of a new condo can move closer to about $1,034 per square foot after the rebate is factored in. That is a meaningful improvement, but it still leaves a premium compared with resale.
For many buyers, the key question becomes simple: is a brand-new unit worth paying more for?
The answer depends on the building, location, layout, warranty coverage, closing costs, and the buyer’s long-term plans.
How the HST Rebate Works
The Ontario government announced a temporary HST rebate on new homes for owner-occupiers and rental investors. The maximum rebate is up to $130,000, but that does not mean every buyer automatically receives $130,000 off the purchase price.
The structure is more specific:
The rebate is also time-limited, which is one reason activity has increased in parts of the new home market. Buyers who are already considering a new build may feel more urgency if the rebate meaningfully improves the numbers.
Every Builder May Handle the Rebate Differently
One important detail buyers need to understand is that builders may not all apply the rebate the same way.
Some developers may reflect the rebate directly in the purchase price. Others may keep the listed price unchanged and require the buyer to apply for the rebate after closing. In some cases, the treatment of the rebate may vary from one project to another.
That means buyers should not assume the advertised price already includes the full benefit.
Before making a decision, buyers should ask clear questions:
Is the rebate already included in the price?
Does the buyer need to apply for it separately?
What paperwork is required?
When will the buyer receive the benefit?
How does the rebate affect closing costs?
Because buyers may need to file the proper GST/HST new housing rebate application within two years of closing, it is important to understand the process before signing an agreement.
Houses Are Responding Better Than Condos
The rebate appears to be having a stronger effect on new houses than on new condos.
That makes sense. In many cases, a new house may now be priced closer to a comparable resale home after the rebate is considered. For some buyers, paying a 10% to 20% premium for a brand-new house may feel reasonable, especially if the alternative is an older property that may need repairs, updates, or renovations.
New homes also come with benefits such as a pre-delivery inspection, where buyers can identify items that need to be corrected before or shortly after closing. For buyers who want less maintenance and a more modern product, that can be attractive.
Condos are different. Even after the rebate, many new condos still carry a noticeable premium over resale units. That makes the value calculation more difficult, especially in a market with high inventory and slower sales.
What This Means for Buyers
For buyers, the current market creates both opportunity and risk.
The opportunity is that there is more inventory, more flexibility, and in some cases, meaningful savings through the HST rebate. Buyers may be able to find new homes or completed condo units that were previously too expensive compared with resale options.
The risk is that not every new property is automatically a good deal. A rebate can improve the numbers, but it should not be the only reason to buy.
Buyers should compare the new property against resale options in the same area. They should also review the total cost, including taxes, maintenance fees, closing adjustments, occupancy fees if applicable, financing costs, and future resale potential.
A lower effective price is helpful, but the property still needs to make sense.
Ontario’s new HST rebate has clearly added energy to parts of the GTA new home market, especially for single-family homes. It has helped narrow the price gap between new and resale properties and encouraged more buyers to take another look at new construction.
However, the condo market remains under pressure. High inventory, weak pre-construction sales, and a large price gap between new and resale condos continue to weigh on activity.
For buyers, this is a market that rewards careful analysis. The rebate can be valuable, but the details matter. Each builder may handle it differently, and each property needs to be judged on its own merits.
The smartest move is to compare the full cost of buying new versus resale, understand exactly how the rebate applies, and make sure the property fits both your lifestyle and your financial plan.
Just over two months after the rebate was announced, the early results are noticeable. New construction houses have seen a strong increase in activity, while the condo market remains much slower. For buyers, investors, and anyone thinking about making a move in the GTA, this rebate could make a meaningful difference — but it depends heavily on the type of property, the price point, and how each builder applies the rebate.
The New Home Market Is Not Moving as One Market
The GTA housing market is currently split into two very different stories.
On one side, new single-family homes are gaining momentum. In April, new single-family home sales in the Toronto region reached 901 sales, which was roughly triple the volume from the same period last year. That suggests the rebate is helping bring some buyers back to the new home market, especially where prices are now closer to resale alternatives.
On the other side, condos are still facing serious challenges.
Condo leasing demand remains strong, which shows that people still want to live in the Greater Toronto and Hamilton Area. However, resale condo sales are near some of the lowest levels seen in about a decade. Pre-construction condo sales have also struggled, with Q1 sales reaching a 35-year low.
This matters because it shows that demand for housing has not disappeared. Instead, buyers are being much more cautious about price, value, and monthly carrying costs.
Condo Inventory Has Reached a Concerning Level
One of the biggest issues in the condo market is inventory.
In Q1 2026, total unsold new condo inventory reached 19,608 units. There were also about 4,300 newly completed but unsold condo units, which works out to roughly 92 months of completed new condo supply.
That is about seven and a half years of inventory.
For context, a balanced or slower resale condo market in Toronto might have several months of inventory. A very hot market can have only one or two months. Seven and a half years is an unusually high amount of supply.
This large inventory level puts pressure on builders and sellers. It also gives buyers more options and more negotiating power, especially when looking at completed units that developers want to move.
New Condos Are Still More Expensive Than Resale Condos
Price remains one of the main reasons condos have not recovered as quickly as houses.
The average asking price for newly completed condos is just under $1,200 per square foot. That is down about 5% from last year and roughly 30% from the peak three years ago.
Even with that decline, new condos are still much more expensive than resale condos. The average resale condo price in the GTHA is around $859 per square foot. That means buyers are still looking at a large premium for a brand-new unit. The HST rebate helps narrow that gap. In some cases, the effective price of a new condo can move closer to about $1,034 per square foot after the rebate is factored in. That is a meaningful improvement, but it still leaves a premium compared with resale.
For many buyers, the key question becomes simple: is a brand-new unit worth paying more for?
The answer depends on the building, location, layout, warranty coverage, closing costs, and the buyer’s long-term plans.
How the HST Rebate Works
The Ontario government announced a temporary HST rebate on new homes for owner-occupiers and rental investors. The maximum rebate is up to $130,000, but that does not mean every buyer automatically receives $130,000 off the purchase price.
The structure is more specific:
- Homes up to $1 million may qualify for a full 13% HST rebate, up to a maximum of $130,000.
- Homes up to $1.5 million may still qualify for the maximum rebate.
- Homes between $1.5 million and $1.85 million may qualify for a partial rebate.
- Homes above $1.85 million may still receive a smaller baseline rebate.
The rebate is also time-limited, which is one reason activity has increased in parts of the new home market. Buyers who are already considering a new build may feel more urgency if the rebate meaningfully improves the numbers.
Every Builder May Handle the Rebate Differently
One important detail buyers need to understand is that builders may not all apply the rebate the same way.
Some developers may reflect the rebate directly in the purchase price. Others may keep the listed price unchanged and require the buyer to apply for the rebate after closing. In some cases, the treatment of the rebate may vary from one project to another.
That means buyers should not assume the advertised price already includes the full benefit.
Before making a decision, buyers should ask clear questions:
Is the rebate already included in the price?
Does the buyer need to apply for it separately?
What paperwork is required?
When will the buyer receive the benefit?
How does the rebate affect closing costs?
Because buyers may need to file the proper GST/HST new housing rebate application within two years of closing, it is important to understand the process before signing an agreement.
Houses Are Responding Better Than Condos
The rebate appears to be having a stronger effect on new houses than on new condos.
That makes sense. In many cases, a new house may now be priced closer to a comparable resale home after the rebate is considered. For some buyers, paying a 10% to 20% premium for a brand-new house may feel reasonable, especially if the alternative is an older property that may need repairs, updates, or renovations.
New homes also come with benefits such as a pre-delivery inspection, where buyers can identify items that need to be corrected before or shortly after closing. For buyers who want less maintenance and a more modern product, that can be attractive.
Condos are different. Even after the rebate, many new condos still carry a noticeable premium over resale units. That makes the value calculation more difficult, especially in a market with high inventory and slower sales.
What This Means for Buyers
For buyers, the current market creates both opportunity and risk.
The opportunity is that there is more inventory, more flexibility, and in some cases, meaningful savings through the HST rebate. Buyers may be able to find new homes or completed condo units that were previously too expensive compared with resale options.
The risk is that not every new property is automatically a good deal. A rebate can improve the numbers, but it should not be the only reason to buy.
Buyers should compare the new property against resale options in the same area. They should also review the total cost, including taxes, maintenance fees, closing adjustments, occupancy fees if applicable, financing costs, and future resale potential.
A lower effective price is helpful, but the property still needs to make sense.
Ontario’s new HST rebate has clearly added energy to parts of the GTA new home market, especially for single-family homes. It has helped narrow the price gap between new and resale properties and encouraged more buyers to take another look at new construction.
However, the condo market remains under pressure. High inventory, weak pre-construction sales, and a large price gap between new and resale condos continue to weigh on activity.
For buyers, this is a market that rewards careful analysis. The rebate can be valuable, but the details matter. Each builder may handle it differently, and each property needs to be judged on its own merits.
The smartest move is to compare the full cost of buying new versus resale, understand exactly how the rebate applies, and make sure the property fits both your lifestyle and your financial plan.
