Ontario Waives HST on New Homes — Help Your Buyers Save Up to $130,000
In this episode, Scott breaks down one of the most exciting government programs to hit the new construction market: Ontario's HST waiver on all new homes. The Ontario government is waiving HST on all new homes in the…
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Show notes
Scott Dillingham is a Licensed Mortgage Agent Level 2 who has helped clients finance over $2B+ in real estate. He works closely with REALTORS® across Ontario to help their clients get financing approved — and in this episode, Scott breaks down one of the most exciting government programs to hit the new construction market: Ontario's HST waiver on all new homes.
The Ontario government is waiving HST on all new homes in the province — and this program is not limited to first-time buyers. Any buyer purchasing a new construction home can take advantage of it. For homes valued at approximately $1.5 million or below, buyers can receive up to $130,000 back. For homes priced above that threshold, the government applies a sliding scale, with a minimum rebate of $24,000 for homes valued at $1.85 million or above. This is a massive savings opportunity that REALTORS® can use to attract and close more buyers.
On top of the HST waiver, there's another program that can be stacked on top: the Energy Star CMHC rebate. If a new construction home qualifies as an Energy Star rated home — which most new Ontario builds already do thanks to today's strict building codes — buyers can receive 25% of their CMHC insurance premium back. That works out to roughly 1% of the loan amount. On a $500,000 purchase with a minimum 5% down payment, that's an additional $4,750 back in the buyer's pocket.
Scott shares a real-world example of a developer in the Windsor Essex area building semi-detached two-unit homes for approximately $500,000. With no HST to pay and the potential Energy Star rebate, these homes become remarkably affordable — especially since the builder has specifically designed them so the basement rental income more than covers the full mortgage payment. This combination of programs and smart property design creates an incredible opportunity for REALTORS® to help clients who want to own a home with virtually no out-of-pocket housing cost.
Key Takeaways
- Ontario's HST waiver applies to ALL new home buyers — not just first-time buyers — starting April 1st.
- Buyers can receive up to $130,000 back on homes valued at approximately $1.5 million or below.
- A sliding scale applies above $1.5M, with a minimum rebate of $24,000 for homes $1.85M and above.
- The Energy Star CMHC rebate adds 25% of the CMHC premium back — equal to approximately 1% of the loan amount.
- Most new Ontario builds already qualify for Energy Star status due to current provincial building codes.
- Stacking both programs delivers maximum savings — eliminating HST and recovering a portion of mortgage insurance costs.
- Smart developers are designing rental-income units that allow buyers to cover their full mortgage with basement rental income.
- REALTORS® can use these programs as a powerful buyer conversation starter to close more deals on new construction properties.
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- (00:00) - Welcome & Introduction
- (00:05) - Ontario HST Waiver on New Homes
- (00:36) - How the Rebate Works: Up to $130,000
- (01:27) - Energy Star Program: 25% CMHC Fee Rebate
- (01:51) - Stacking Both Programs for Maximum Savings
- (02:33) - Real Example: Windsor Essex $500K Semi-Detached Homes
- (03:21) - Rent-to-Cover-Mortgage Strategy
- (03:53) - Key Takeaways & Action Steps for REALTORs
Realtor questions from this episode
Does Ontario's HST waiver on new homes only apply to first-time buyers?
No. Scott explains that the Ontario government is waiving HST on all new homes and that the program does not have to be a first-time purchase: it works for any buyer of a new home.
How much can buyers get back under the HST waiver?
Scott says buyers can get up to $130,000 back. He adds that the government reduces the rebate on higher-priced homes on a sliding scale, so the maximum rebate goes to buyers of lower-priced homes.
Is there another program a buyer can combine with the HST waiver?
Yes. If the new home gets an energy audit and is rated Energy Star, the buyer can get 25% of their CMHC fee back, which Scott says equals about 1% of the loan amount. He notes that most new Ontario builds already qualify because of the strict building code. His example is a $500,000 home with the minimum 5% down, where the buyer gets $4,750 back.
Transcript
Transcript of the episode as recorded. Rates, fees and program details are as stated on the recording date and may have changed.
Welcome back to the Close More Deals podcast.
Welcome back to the Close More Deals podcast. I'm your host, Scott Dillingham. Today, I want to make this announcement for you an episode because the Ontario government is working with the provincial government to waive HST on all new homes in Ontario. Now, this does not have to apply for a first time home buyer and it works for any buyers. and there's another program that you can combine with us. So I wanna dive into kind of what we're doing for our clients.
Now this program starts April 1st. So by the time you're hearing this, it's gonna be active. So you can get up to $130,000 rebate the supplies to homes at approximately 1.5 or below. If it's above that, the government has a sliding scale of a reduction in that to a minimum of 20 sorry maximum of 24 grand as a rebate for homes valued at 1.85 or above. So what the government is essentially doing is they're limiting the rebate for wealthy buyers, but they're offering maximum rebate to those that are not wealthy, right?
So the 13% applies again up to $130,000. Now, let's, and actually, I'm going to I'm going to give you an exact example. But we have another program available, where you could do an energy audit. and your home gets an energy rating. And if your home is rated as an Energy Star rated home, you can actually get 25% of the buyer's CMHC fee. They can get that back. So when you combine these programs, and here's the beautiful thing, Ontario Code has gotten so tough that when you do build a new property, it generally meets most, if not all the Energy Star criteria.
So most of these homes, not all of them, but most of these homes automatically qualify for the Energy Star Rating. So it depends on where you're located and we've got the team we can we can show you guys if you work with us for the financing for your buyers. But ultimately what you can do is you can get the uh Energy Audit done on this new construction property. if it meets the criteria, the borrower gets 25% of the CMHC fee, like I already mentioned.
That equals about, well, exactly 1% of the loan amount.
That equals about, well, exactly 1% of the loan amount. So let me give you an example, and I'll show you exactly what we're building. So we are working with a developer who's in the final stages of... like getting the project ready to go, because there's some things you gotta do before. But ultimately, um he's going to be selling semi-detached two unit homes for approximately 500,000. Now at 500,000 we need 25 grand down as the minimum down payment, so 5%. This borrower is gonna get 4,750 back pending that the new home uh meets the Energy Star requirements.
Obviously they're not gonna pay the HST so the purchasing price is gonna be less. Now this builder setting these homes up strategically so you can rent out the basement and the rent should more than cover the complete mortgage. So this developer is building these for homeowners that want to essentially have no mortgage payments. So it's a fantastic idea, but when you combine these programs, it just offers an immense savings. Now this specific builder and developer is in Windsor Essex area. Obviously the purchase prices, construction costs, all those things differ across the province.
But I think it's a fantastic program to help you to close more deals and, and again, combining them, give your borrowers that extra and additional savings. So I think it's absolutely fantastic. And I'm glad now you know about it. Share this with your friends. It's important. Share it with your buyers and send us your clients. We're here to help. Our details will be in the show notes. Looking forward to chatting with you next time.