Ontario released its 2026 Economic Outlook and Fiscal Review on October 29, 2026. For home buyers, the most useful parts are not new spending but firm dates: the province restated how long its temporary HST relief on new homes runs, when the top-up payment is expected to arrive, and when the long-standing Ontario new housing rebate ends. It also trimmed its housing starts forecast.
- Temporary relief of up to $130,000 in HST on eligible new or substantially renovated homes, generally for purchases from a builder between April 1, 2026 and March 31, 2027.
- The Ontario New Home Affordability Payment (the federal-portion top-up of up to $50,000) is expected to be paid starting in early 2027.
- The existing Ontario New Housing Rebate (up to $24,000) generally ends for agreements signed after March 31, 2027.
- Projected 2026–27 deficit: $16.9 billion. Real GDP growth forecast for 2026: 0.5%.
What the statement says about new-home HST
According to the statement's tax annex, the relief has two parts. Enhanced Ontario rebates cover up to $80,000 of the 8% provincial portion of the HST when combined with the existing rebates. A separate Ontario New Home Affordability Payment adds up to $50,000, equal to up to the full 5% federal portion. Together they cover 100% of the 13% HST on eligible homes valued up to $1 million, a flat $130,000 between $1 million and $1.5 million, partial relief between $1.5 million and $1.85 million, and only the existing rebate of up to $24,000 at $1.85 million and above.
Two practical details matter. First, applications for the enhanced rebates go through Canada Revenue Agency forms, and the province says no separate application is needed for the top-up payment, which it expects to begin issuing in early 2027. Second, the top-up is reduced by any federal HST rebate the buyer can claim, including the federal First-Time Home Buyers' Rebate, so first-time buyers should not add the two together.
The statement also confirms the province is ending the regular New Housing Rebate and New Residential Rental Property Rebate. They generally remain available only where the agreement of purchase and sale is signed on or before March 31, 2027 (or, for owner-built homes, where construction starts by then). Proposed amendments would also raise the penalty for false statements in first-time buyer land transfer tax refund applications from $4,000 to $10,000.
A softer housing outlook
The province's planning forecast, based on a private-sector average as of September 11, 2026, now expects 64,700 housing starts in 2026 and 65,100 in 2027, down from 70,300 for 2027 in the spring budget. It projects Ontario home resale prices to fall 2.4% in 2026 before rising 1.4% in 2027. Our interpretation: a lower starts forecast alongside an expiring HST window suggests the province expects builders to keep relying on incentives through early 2027.
Who is affected and what to check
Buyers of new or substantially renovated homes in Ontario, especially those signing with a builder before March 31, 2027, are most affected. Before signing, ask the builder how the rebate is handled in the price, whether the rebate is credited at closing or claimed later, and confirm eligibility on the CRA form. Budget for closing costs that are not covered, using the closing costs calculator and the land transfer tax calculator. A mortgage broker can help line up financing that matches a new-build closing date.
Sources
- Ontario Ministry of Finance, 2026 Ontario Economic Outlook and Fiscal Review: A Plan to Protect Ontario, 2026-10-29. Accessed 2026-11-02.
- Ontario Ministry of Finance, 2026 Ontario Economic Outlook and Fiscal Review — Background Papers (PDF), 2026-10-29. Accessed 2026-11-02.
General information only, not tax, legal or financial advice. Rebate rules are set by legislation and CRA forms; confirm eligibility before relying on any amount.
