HST removal prompts surge in new home sales in Ontario in 2nd quarter: industry groups

New home sales jumped 130% year-over-year due to temporary HST rebate, groups say

New home sales in Ontario surged during the second quarter of this year thanks to the removal of the harmonized sales tax, according to new data released by two industry groups.

Sales of new homes jumped 130 per cent year-over-year in the second quarter due to a temporary expansion of a provincial-federal HST rebate program for buyers of eligible homes, the Building Industry and Land Development Association (BILD) and Ontario Home Builders’ Association (OHBA) said Tuesday.

Data shows that 8,410 new homes were sold in Ontario in the second quarter.

An economic analysis determined that the sale of 4,765 of these new homes can be attributed to the expanded HST rebate program, the industry groups said in a news release Tuesday. They said the number is a significant increase from the same time period in 2025, when 3,645 new homes sold in Ontario.

"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."

In March, the Ontario government announced it would remove the full 13 per cent HST for eligible buyers of new homes valued up to $1 million, for a maximum rebate of $130,000, as part of its provincial budget and with federal financial help. The rebate gradually declines for more expensive homes.

The expanded program began April 1, took full effect in late June and will end on March 31, 2027.

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Andison said the change has made a big difference for affordability and bringing down prices for individual families, as well as for employment and protecting jobs in Ontario's home building, development and renovation industry.

"It meant the difference between a family qualifying for a mortgage and not," Andison said.

Data should be taken with 'grain of salt,' broker says

Some in the industry, however, are skeptical of the positive picture being painted by the industry groups.

David Fleming, a broker based in Toronto, said he questions the numbers, given that home sales have been in such a slump. He said home sales may have more than doubled in the second quarter but they have done so from a historic low, and they are still below significantly from what they were at the peak in spring of 2022.

"I have not had a single person contact me and use the word HST," Fleming said.

"We have to take it with a grain of salt because, of course, BILD is going to say that sales are happening, but we're still double from an all-time low. You can make numbers say anything you want."

Fleming, however, said there's no question homes are more affordable than they have been in some time.

Measure intended to provide savings, ministry says

Sarah Chapin, spokesperson for Ontario Finance Minister Peter Bethlenfalvy, said in a statement Tuesday that the government is committed to making home ownership more affordable.

"We know that it costs too much and takes too long to build new homes in Ontario. That is why our government introduced a series of measures to reduce the time and cost of building," Chapin said.

"Our government will continue to work with our municipal and federal partners to create the conditions to get more shovels in the ground, build more homes faster and help make the dream of homeownership a reality for more people.”

With files from Muriel Draaisma and Naama Weingarten