You Could Save Up to $130,000 on a New Home in Ontario — Here’s How
What if I told you the Ontario government just handed buyers a six-figure discount on new construction homes?
No catch. No fine print maze. Just real money back in your pocket — or your buyer’s pocket.
The Ontario government is waiving HST on new homes in the province for a limited time (April 1, 2026 to March 31, 2027). That’s up to $130,000 in savings on qualifying properties. And here’s the part most people miss: you can stack a second program on top of it and squeeze even more savings out of the deal.
Let me break this down for you.
What the Ontario HST Rebate Actually Means
HST in Ontario sits at 13%. On a new construction home, that tax adds up fast. The government is now removing the full 8% provincial portion of HST for eligible buyers under the enhanced 2026 program.
Here’s the breakdown:
- Homes priced at $1M or below — you get the full rebate, up to approximately $130,000 (full 13% HST removed)
- Homes between $1M and $1.5M — you receive a flat $130,000 sales tax reduction
- Homes between $1.5M and $1.85M — the rebate slides down on a scale from $130,000 to $24,000
- Homes above $1.85M — you still get a rebate, but it maxes out at $24,000
The government is basically saying: if you’re not buying a mansion, we’ve got your back. The full benefit goes to everyday buyers. Wealthy buyers still get something, but the big money goes to regular Ontarians.
And this isn’t just for first-time home buyers. Any buyer qualifies — including investors purchasing for long-term rental. That’s huge for investors and move-up buyers who usually get left out of government programs.
Important timing note: This enhanced rebate applies to purchase agreements signed between April 1, 2026 and March 31, 2027. Construction must begin by December 31, 2028 and be substantially completed by December 31, 2031 for primary residences (December 31, 2029 for rental properties). This is a one-year program — take advantage of it while it lasts.
Most buyers miss the CMHC Energy Star rebate entirely — that’s $4,750+ left on the table. book a free strategy call with LendCity and we’ll make sure you capture both the HST waiver and the energy rebate on your new construction purchase.
Stack the CMHC Energy Star Rebate on Top
Here’s where it gets really interesting.
There’s a second program most buyers don’t know about. If a new home earns an Energy Star rating, the buyer gets 25% of their CMHC insurance premium back. That works out to roughly 1% of the loan amount.
On a $475,000 mortgage, that’s $4,750 back. Not a coupon. Actual money.
Now you might be thinking — how hard is it to get an Energy Star rating? Here’s the thing: Ontario’s building code is already so strict that most new construction homes automatically meet Energy Star criteria. Builders are essentially being forced to build energy-efficient homes whether they want to or not.
So in many cases, buyers don’t have to do anything special. They just need to get an energy audit done on the property to confirm the rating. If it qualifies — and most new builds do — they pocket that extra 1%.
Combine the HST waiver with the CMHC Energy Star rebate and you’re looking at a serious amount of money saved on a single purchase.
A Real Example: $500,000 Semi-Detached in Windsor-Essex
Let me show you exactly how this plays out with real numbers.
There’s a developer in the Windsor-Essex area building semi-detached, two-unit homes priced at approximately $500,000. These aren’t cookie-cutter starter homes either — they’re designed so the owner can rent out the basement suite, with rental income projected to cover the full mortgage payment.
Here’s what the numbers look like for a buyer:
- Purchase price: ~$500,000
- Minimum down payment (5%): $25,000
- HST savings: Built into the purchase price — buyers don’t pay it
- CMHC Energy Star rebate: ~$4,750 back (pending energy audit confirmation)
So the buyer puts $25,000 down, gets nearly $5,000 back from the CMHC rebate, and moves into a home where the basement tenant essentially pays the mortgage. That’s the kind of deal that changes someone’s financial picture.
For investors, this is a no-brainer. For first-time buyers who want to house hack, it’s even better.
A $500,000 two-unit home where rent covers your mortgage changes everything — but only if you structure the financing right. schedule a free strategy session with us and let’s build a strategy that maximizes the government incentives and your rental income.
How to Actually Use These Programs
Here’s what you need to do:
Step 1: Confirm the property qualifies for the HST waiver. New construction homes in Ontario priced under $1.5M get the full rebate. Make sure your purchase agreement reflects the HST-exempt price.
Step 2: Get an energy audit done. This is the step most buyers skip — and it costs them $4,750. Hire a certified energy auditor to assess the new build. If it hits Energy Star standards (most do), file for the CMHC rebate.
Step 3: Work with a mortgage broker who knows these programs. This is not the time to walk into your bank and hope someone brings it up. Work with a broker who actively tracks these incentives and can structure your financing to capture every dollar available.
Step 4: Think about the rental income. If you’re buying a two-unit property like the Windsor-Essex example, run the numbers on the basement suite. If rent covers your mortgage, you’re essentially living for free — or cash flowing from day one as an investor.
Why This Matters for Real Estate Investors and Agents
If you’re an investor, new construction just got a lot more attractive in Ontario. Lower effective purchase price, potential rental income built into the design, and government money coming back to you — that’s a strong combination.
If you’re a real estate agent or mortgage broker, this is your edge right now. Most buyers have no idea these programs exist. The ones who do will close deals. The ones who don’t will sit on the sidelines waiting for rates to drop.
Share this with your buyers. Share it with your network. The program is active and the savings are real.
Frequently Asked Questions
Does the Ontario HST rebate apply to first-time buyers only?
What's the maximum HST rebate available on a new Ontario home?
How does the CMHC Energy Star rebate work?
Do all new construction homes in Ontario qualify for the Energy Star rebate?
Can I combine the HST rebate and the CMHC Energy Star rebate?
What's the minimum down payment on a $500,000 new construction home in Ontario?
Where can I find new construction homes that qualify for both programs?
Is this a good strategy for real estate investors?
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Consult a licensed mortgage professional before making any financing decisions.
Written by
LendCity
Published
March 30, 2026
· Updated April 12, 2026Reading time
7 min read
HST Rebate
An HST Rebate is a refund of Harmonized Sales Tax paid on the purchase of a newly constructed or substantially renovated property, available to eligible buyers in participating Canadian provinces, effectively reducing the net cost of the property acquisition.
CMHC Energy Star Rebate
The CMHC Energy Star Rebate is a financial incentive offered by Canada Mortgage and Housing Corporation that provides mortgage insurance premium reductions for borrowers purchasing energy-efficient homes that meet specific environmental standards. For Canadian real estate investors, this rebate lowers financing costs on qualifying properties, making energy-efficient investments more economically attractive while promoting sustainable housing.
New Construction
New Construction refers to residential or commercial properties that have been newly built and are being sold for the first time, offering Canadian investors the advantage of modern building standards, warranty protections, and potential appreciation as the property enters the market. For investors, new construction provides opportunities for capital gains, customization options, and often incentives from developers, though it may involve longer closing timelines and construction risk compared to resale properties.
House Hacking
Living in one unit of a multi-unit property while renting out the others to offset your mortgage payments and living expenses.
Mortgage Insurance Premium
The fee charged by CMHC or other insurers for mortgage default insurance on high-ratio mortgages. The premium is calculated as a percentage of the loan amount and can be added to the mortgage balance or paid upfront.
Hover over terms to see definitions. View the full glossary for all terms.