The tax break is designed to help clear out thousands of newly built condos.Graeme Roy/The Canadian Press
Ontario’s new home market is heating up after sales tax rebates went into effect this month, but it’s too early to say whether the move will revive a sector that has been in a slump for years.
In the first week of the 13-per-cent HST rebate on new homes in the province, buyers have been snapping up properties and deluging many developers with calls.
Under the Ontario and federal government plan, buyers have a year from between April 1 and March 31, 2027, to take advantage of the tax break.
Major homebuilder Minto Group said it sold nearly 120 new homes in Ottawa and the Toronto region after the rebate became effective. Before the rebate was announced, Minto was selling far fewer.
“Because the market’s been so subdued, we might have gotten 10 to 15 over the course of a week, so that’s fantastic,” Minto chief executive officer Michael Waters said. “The question is, is this a short spurt that will peter out, or will it be sustained,” he said.
Southern Ontario homebuilder Branthaven Homes similarly said it sold more homes over the past week than in all of 2025.
“We’re ecstatic. It was so grim for the last four years and now this has breathed a little life into us,” said Steve Stipsits, Branthaven’s president and owner.
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The developer, which has been building homes for more than five decades, sold 120 townhomes in Milton and Mississauga since the rebate took effect. It also sold about 20 of its newly built condos in Oakville.
The tax break is designed to help clear out thousands of newly built condos and help kickstart the homebuilding industry.
For buyers who plan to live in their newly built home, construction has to start prior to Dec. 31, 2028 to qualify for the rebate.
For investors who plan to rent the unit, construction had to have started prior to March 31, 2026, according the province’s website.
The rebate is not yet enacted in legislation, but with the April 1 effective date, many developers and buyers have acted as though it is in place. It is not clear when it will become law or when more details will be provided.
The province’s Finance Ministry directed inquiries to Ottawa. The federal Finance Department said the two levels of government were currently discussing implementation details.
“As a result, we cannot speculate on potential timelines at this time,” said Marie-France Faucher, a Department of Finance spokesperson.
Regardless, developers say they have received more calls and sales since the rebate was announced in March.,
“It’s been a jolt to the industry,” said Dave Wilkes, president of trade group Building Industry and Land Development Association. Mr. Wilkes said developers have told him they have seen a surge in sales.
For Branthaven’s Mr. Stipsits, the increase in sales means he can start rehiring some of the staff that he had to let go amid the downturn in preconstruction homes that began in the latter half of 2022. He estimates that he will hire up to 30 more staff and said his dozens of subcontractors will also have work.
New Horizon Development Group said prices of its new homes will be cheaper because of the rebate and the lower price will make them more affordable for buyers. (Buyers do not pay sales taxes on top of the advertised price of a new home; the HST is factored into the price by the builder.) President Jeff Paikin said New Horizon plans to soon launch a townhome project in Watertown.
However, not all homebuilders have seen more sales after the rebate announcement and those that have question the strength of the rebound.
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Toronto builder TAS called the rebate an important step. CEO Mazyar Mortazavi said hopefully it “will help unlock some momentum.” But he also said it was too early to have an impact on sales given that the legislation has not yet been ratified.
Fernbrook Homes, which has been building homes in Ontario for 45 years and developed the curvy condo skyscrapers that define Mississauga’s skyline, said it has received a lot of calls, but no sales.
“We’ve had many calls and inquiries showing interest, which is positive,” Fernbrook CEO Joe Salvatore said. But Mr. Salvatore said those calls have “resulted in no sales. Zero.”
In 2025, Mr. Salvatore said sales were dismal, with fewer than 100 units sold compared to an average of about 800 homes a year in previous years.
He said buyers want clarity on the HST legislation and said they are “100,000 per cent gun shy” with the constant economic upheaval, including from the U.S. trade war.
Preconstruction housing market expert Pauline Lierman said the rebate will help in some cases but she also said that overall market sentiment is weak after years of dismal activity, falling prices, defaults and economic turmoil.
“I don’t think we will see a wave of buyers. Demand and confidence is not all there,” said Ms. Lierman, a Toronto-based vice-president of market research with new home research company Zonda Urban.
Over the past four years, a slew of developers have either cancelled or postponed condo projects, turned their condo projects into rental buildings, or have been forced into receivership by their lenders.
In the greater Toronto and Hamilton region, 10,715 planned condo units have been cancelled since 2022, according to Zonda. That includes 1,659 units in the first three months of this year.
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Solmar Development Corp. recently decided to cancel its large Brampton condo project, called Bristol Place. It had sold 10 per cent of the condo project’s units when it made the switch to rental apartments.
Solmar executive vice-president Angela Marotta said there was a lot of inventory coming onto the market that exceeded demand.
She also said buyers were having difficulty coming up with the down payment and qualifying for a mortgage. Affordability continues to be an issue, regardless of the rebates, Ms. Marotta said in an e-mail.
She said shifting Bristol to rental was the right thing to do to meet the increased demand from residents not yet ready to buy but who still want to live in Brampton.
Minto, meanwhile, said it will not be launching any condo projects in the near future.
“We’ve got a lot of condo sites we would not be launching either,” Minto’s Mr. Waters said. “We’d be waiting for a lot of this excess supply to get cleared up,” he said.
Mr. Waters said he thinks sales will moderate from the past week’s faster pace but predicts it will be higher than during the downturn, which would allow some builders to start building new homes.