03/28/2026
For our Clients >> What do the recent housing tax announcements mean for you in 2026/2027? Summary:
The most significant update is a temporary, one-year tax holiday on the Harmonized Sales Tax (HST) for "new" builds, which can save you up to $130,000.
1. The 2026 Expanded HST Rebate
Previously, only first-time buyers received a significant break, but the new rules (effective April 1, 2026) expand this to include custom self-builds and rental properties.
* The Benefit: For homes valued up to $1 million, the provincial and federal governments are effectively removing the 13% HST. This is delivered as a rebate of up to $130,000.
* The "Sliding Scale":
* Up to $1.5M: You can still receive the full $130,000 rebate.
* $1.5M to $1.85M: The rebate gradually phases down from $130,000 to $24,000.
* Over $1.85M: The rebate stays capped at the standard $24,000.
* Critical Deadlines: To qualify for this expanded amount, you must sign your construction or purchase agreement between April 1, 2026, and March 31, 2027.
2. GST/HST New Housing Rebate (Owner-Built)
If you are physically building the home yourself (acting as the owner-builder), you can recover the federal portion of the tax paid on materials and services.
* How it works: You keep all your invoices for lumber, electrical, plumbing, etc. Once the house is "substantially complete," you file Form GST191.
* Stacking: Under the new 2026 rules, this is the mechanism used to claim the larger combined rebate mentioned above.
3. First-Time Home Buyer's Tax Credit (FTHBTC)
If you have not owned a home in the last four years, you can claim a $10,000 non-refundable tax credit on your federal return, which results in a direct tax savings of $1,500. Ontario also offers a Land Transfer Tax refund of up to $4,000 for first-time buyers, though this applies to the land purchase itself.
4. Multigenerational Home Renovation Tax Credit
If your new build includes a secondary suite (like a basement apartment or "coach house") for a senior relative or a family member with a disability, you can claim 15% of those specific costs up to $50,000.
* Max Credit: $7,500.
* Requirement: The unit must be self-contained with its own entrance, kitchen, and bathroom.
5. Energy Efficiency Rebates
While not traditional "tax credits," there are significant grants available through the Home Renovation Savings Program (Enbridge/Save on Energy) that apply to new builds:
* Air Source Heat Pumps: Up to $7,500.
* Solar Panels & Battery Storage: Up to $10,000.
Summary Table for Budgeting:
| Expanded HST Rebate | Up to $130,000 | Homes under $1.5M (2026-2027 window) |
| First-Time Buyer Credit | $1,500 (Federal) | Those who haven't owned in 4 years |
| Multigenerational Credit | Up to $7,500 | Including an in-law or secondary suite |
| Energy Rebates | $500 – $10,000 | Installing high-efficiency HVAC or Solar |
Greg Schryer
905-925-MOVE
