‘The program is working’: Ontario home sales surge 130% after HST rebate

Home sales in Ontario have significantly increased in the second quarter of 2026, following the provincial government’s Harmonized Sales Tax (HST) cut for new homes. 

A report by Building Industry and Land Development Association (BILD) and Ontario Home Builders’ Association (OHBA) revealed that total home sales have jumped from 3,645 in the second quarter of 2025 to 8,410 in the same period of 2026, representing a 130 per cent increase year-over-year. 

The numbers represent a significant increase, especially after several months of slow activity in the new housing sales market in Ontario. 

Is Ontario’s HST rebate driving the sales increase?

According to the report, the findings also come months after Premier Doug Ford’s government removed the full 13 per cent HST on all new home sales between April 1, 2026 and Mar. 31, 2027. 

The initiative enables buyers of all new homes up to $1.5 million to qualify for a tax rebate of up to $130,000, with the rebate decreasing proportionately for properties over $1.5 million, and reaching a maximum of $24,000 for those valued above $1.85 million.

BILD’s Chief Operating Officer Justin Sherwood tells Now Toronto the increase in sales was expected according to early studies. 

“The Q2 performance is on track with what we were anticipating. So, the program is working, and it’s working largely as predicted,” he said. 

Single-family home sales soar, but condos lag behind

According to Sherwood, most of the recorded sales came from single family homes, which increased from 2,582 in 2025 to 7,215 in 2026. 

Meanwhile, condo sales were still on the slower end. While 1,063 sales were recorded in the second quarter of 2025, 1,195 were recorded in the same period in 2026. 

Sherwood said these slower results might reflect strict timeline requirements for the HST cuts, which determines that the construction of the home needs to begin on or before Dec. 31, 2028 and be completed by Dec. 31, 2031 to be eligible for the rebate. 

“It’s just too short a time frame, given how long it takes to construct a condo building, so those dates need to be adjusted if the condo is going to participate fully,” he added. 

Increased sales could mean more jobs, housing, and economic benefits

While the real estate market seems to have slowed down over the past year, especially compared to a boom in the market back in 2021 and 2022, prices seemed to also have followed suit, as buyers found more leverage to negotiate. 

However, less sales don’t automatically translate into continuously decreasing prices and benefits for buyers. 

What happens when the HST rebate ends?

According to Sherwood, prices actually seem to have reached a bottom, with little room left for further decrease. In addition, the HST rebate is currently expected to end by March of 2027, so buyers who wait beyond that might lose on the opportunity to get up to $130,000 of discount.

In addition, Sherwood explains that low sales can lead to a series of other economic concerns, including a slowdown on housing starts and job shortages. 

“2024 and 2025 were the worst years on record for new home sales in the GTA. They were even below the record lows of the early 90s,” he said. 

“Housing is a pipeline, what that that meant was [that] we were going to be looking at housing shortages in the 2029-2030 time period had we not been able to get sales up off the ground. Additionally, we were looking if the sales had continued to be low, we were on the verge of 100,000 layoffs across the province.” 

Through initiatives that encourage home buying, the expert said governments can preserve thousands of high-paying jobs and increase tax revenues for government investment. 

While it is too early to determine if the HST cuts alone will be able to restore the market, Sherwood said the results are on track with early predictions.