By Leor Margulies
Robins Appleby
The Conservatives continue to focus on speeding the approval process and reducing the cost of housing in Ontario through a flurry of legislative announcements. These build on the other previous announcements: More Homes Built Faster Act, 2022 and Cutting Red Tape to Build More Homes Act, 2024, and Fighting Delays, Building Fast Act, 2025. I do love the very graphic descriptions of Ontario’s legislation.
Legislative update
The latest round of announcements in late March 2027, have been equally dramatic and beneficial for new-home buyers. These include:
- Introduction of an across-the-board new home buyer HST rebate both federally and provincially for homes up to $1 million with the rebate continuing to be fully available up to homes for $1.5 million and then ratchetting down to $24,000 at the $1.85-million price point;
- DC grants from the federal and Ontario governments that could fund up to 50 per cent of infrastructure development. The terms have not been fully set out but they would be premised on:
- (i) The municipality agreeing to pass on the full amount of the grants to reduce their DC charges;
- (ii) The municipality updating its development charge background studies to effectively fast track the requirements under Bill 17 and Bill 60 to remove land values from DC calculations. Updating the background studies would in and of themselves potentially reduce DCs from 20 to 25 per cent in many cases. With a further 50-per-cent reduction of infrastructure, this could be a significant reduction in cost that would be passed on to purchasers;
- Clarification from the Minister of Municipal Affairs and Housing, Robert Flack, that the deferral of payment of DCs on residential housing pursuant to Bill 17 would occur on a unit-by-unit basis as each occupancy permit was issued. There was some confusion as to the date that the deferral ended, with many municipalities taking, of course the conservative approach, that the deferral ends when the first occupancy permit is pulled;
- Bill 98 provides for further streamlining of approvals and limiting actions by municipalities. This would include clarification of previous legislation that the site plan process cannot be used to enhance or increase building code requirements including greening of buildings, for which the City of Toronto has been infamous;
- Amalgamating 36 conservation authorities into nine and streamlining the approval process; and
- Reducing substantially, the requirements for inclusionary zoning and suspending them completely on a temporary basis in Toronto, Mississauga and Kitchener.
New-Home buyer rebate conundrum
Those of you who have read our previous article in Builder Bytes entitled “Where Oh Where has the FTHB Rebate Gone?” might be pleased to learn that within days of publication of that article, the federal government finally enacted the FTHB exemption allowing for immediate application of the five-pre-cent rebate for all first-time homebuyers that purchased from and after March 20, 2025.
However, there continue to be uncertainties relating to the provincial component which has not been enacted yet through changes to the Excise Tax Act, nor the new across the board new home construction rebates (New Home Rebates) of up to $130,000 (inclusive of the $24,000 already in place), for all homes purchased between April 1, 2026 and March 31, 2027. The challenge is how are sales to be made for both inventory units and pre-construction units that benefit from the proposed New Home Rebates without the legislation being in effect. As well, how do developers take advantage of the DC reductions without the proposals being clearly enunciated?
I believe I have given some guidance regarding the pre-enactment HST rebate issues in my earlier article on the FTHB. However, it is now clear that the across-the-board HST rebate will be enacted when you have the heads of three levels of government – Olivia Chow, Doug Ford and Prime Minister Carney – making the same announcement. Even though there is little risk that these rebates will not come into effect, most developers have taken a conservative view and structured their agreements in a variety of ways such that the rebate will only be applied if it is in effect on the date of closing and the rebate can be assigned to the developer.
A previous Bulletin by CRA in November 2025 relating to the FTHB is no longer on its website, but made it clear that even if a builder was prepared to accept a conditional assignment of the HST rebate with the legislation not having been enacted by closing, and then applying for it if as and when it came into effect, the builder was not allowed to do so. The CRA took the position that only the purchaser could apply and do so after closing and after the legislation was effected. For the moment, builders must operate on that basis for the New Home Rebates and the provincial component of the FTHB.
- At Robins Appleby LLP, we have developed a variety of options for builders to deal with the interim situation such as:
- Selling on the current basis, which is inclusive of HST, taking into account the $24,000 rebate but providing the purchaser with a further adjustment on closing for any further rebates that are legally in effect as of closing and capable of assignment to the builder. This means, however, selling with a higher price;
- Selling with a lower price on the basis of the price being all inclusive HST for homes up to $1 million, or less $130,00 for homes between $1-million and $1.5-million sale prices, provided that the rebates are available on closing. In the event the rebates are not legally available on closing, there will be a credit in favour of the vendor for these additional rebates that the purchaser will apply for post-closing;
- Selling net of all HST with the purchaser being responsible for payment of HST, it being agreed that the purchaser would be entitled to receive any legal rebates available to them and assignable to the vendor post-closing and makes it clear that it is up to the government to enact the legislation to provide the purchaser with the benefit of the rebates (other than the existing $24,000 provincial rebate). It does allow the builders to sell at the lower price and is very transparent. We also build in extension rights to the purchasers to extend on a number of occasions to allow the legislation to be enacted;
- For inventory units, interim occupancy can be granted either for condominium units or even freehold units with closings to be established at a certain period of time following the enactment of the applicable HST rebate legislation with some sunset date acceptable to the vendor and the purchaser; and
- For those who want to do a quick closing of an inventory unit even before the legislation is enacted, some developers are prepared to sell on the basis of all-inclusive HST up to the amount of the full announced rebate, with the purchaser being responsible for anything above the rebates, whether or not the legislation is in effect on closing. If it is not in effect and the rebates cannot be legally assigned, the purchaser would agree to apply for the rebate post passing of the legislation and repay same to the vendor. This obligation would be secured by a second mortgage on the property. Very attractive to purchasers wanting a quick closing and guaranteed application of the rebates. Riskier for the builder.
Regarding the DC reductions, purchasers have already been requesting from some of my clients, to incorporate some adjustment feature. Many of our clauses provide for an adjustment in favour of the purchaser for increases in the DCs after a certain date, usually the launch date. That clause can simply be amended to cover both increases and decreases.
I am sure there are other ways to address the uncertainties of the legislation, both with respect to HST rebates and the DC reductions and readers are encouraged to speak to their lawyers regarding those options.
I fully expect that the current HST rebate legislation will be passed both federally and on behalf of the province through the Excess Tax Act regulation changes on a much shorter timeframe than the one year it took for the FTHB to be passed. I am advised by BILD and OHBA, that governments know that this is a short window (hopefully, to be extended) for purchasers to buy and with the uncertainties, it is hampering the ability of builders to finalize agreements with purchasers who want to be assured that they will get the benefit of the rebate.
