New homes under construction by Reid’s Heritage Homes in Cambridge, Ont., on Tuesday, June 16, 2026. BILD said new home buyers in the Greater Toronto Area are responding positively to the HST new housing rebate. (Credit: Peter Power)
New sales of low-rise homes beat its 10-year average in May and the enhanced Harmonized Sales Tax (HST) rebate program might have something to do with it, at least according to the Building Industry and Land Development Association (BILD).
Its report said new home buyers in the Greater Toronto Area (GTA) are responding positively to the HST new housing rebate as the program remains a historic buying opportunity for those looking to purchase a new home.
May was the second consecutive month such sales outperformed, as a total of 1,023 new home sales were recorded that month, up significantly from the record low in May 2025, according to Altus Group, where BILD gets its data.
“GTA new home sales in May continued to respond positively to the HST rebate program, led by the single-family sector which surpassed its 10-year average for the second consecutive month,” said Edward Jegg, research manager at Altus Group.
However, May’s numbers were 57 per cent below the 10-year average. Historically, total new home sales for a typical May in the GTA would be 2,353 units based on the previous 10-year average, BILD said.
BILD added the need for clarity on how rebates are administered contributed to some potential buyers delaying purchasing decisions in May.
On March 25, Ontario, in partnership with the federal government, announced the expansion of the HST rebate, which removes the full 13 per cent of the tax for eligible buyers of new homes valued up to $1 million, for a maximum rebate of $130,000.
The program, which aims to lower the cost of new homes, is part of the 2026 Budget and builds on Ontario’s proposal in October to rebate the provincial portion of the HST for first-time home buyers of most new homes.
Meanwhile, Altus Group’s Jegg said condominium apartment sales have not to date benefitted from the rebate program. He listed two main reasons: first, much of the existing product is locked into legacy pricing with higher costs; and second, any new high-rise projects are unlikely to be able to meet the “substantially completed” requirement of the HST rebate program.
Condominium apartments, including units in low, medium and high-rise buildings and stacked townhouses, accounted for 193 units sold in the GTA in May, 89 per cent below the 10-year average, BILD said. There were 830 single-family home sales in the GTA in May, a significant year-over-year increase and 26 per cent above the 10-year average.
Total new home remaining inventory in the GTA dipped below the 20,000 mark for the third time in 24 months with 18,763 units for May, it said. This includes 13,138 condominium apartment units and 5,625 single-family dwellings, representing a combined inventory level of 32 months, based on average sales for the last 12 months.