Dear David,

My partner and I are first-time home buyers who are paying close attention to the market. We are saving our downpayment while waiting for interest rates to drop, and have noticed that housing prices seem to have softened over the past few months. We recently heard about some new government rebates being offered to first-time buyers. If we’re budgeting around $800,000 for a home, how much could these programs save us, and are there limits on the type of home we can buy? I am also wondering how these incentives might impact the market. – ENCOURAGED

DEAR ENCOURAGED: You’re wise to be paying close attention to news from the federal and provincial governments. Both levels are rolling out rebates to help first-time buyers stretch their budget when buying a newly-built home. In broad strokes, the combined programs could save buyers 13 percent on homes valued up to $1 million and offer rebates on a sliding scale for homes valued up to $1.5 million, but the exact calculation will depend on how individual builders apply the HST at the time of sale. Applications for these programs are not yet available.

Both the federal and provincial programs would rebate their respective portions of the HST for first time buyers purchasing newly built or “substantially renovated” homes that buyers live in as their primary residence. “Substantially renovated” means that nearly all of the home’s interior (about 90 percent or more) has been replaced or rebuilt, as opposed to just updated or expanded. Resale homes don’t qualify for the rebates. 

Together, the federal and provincial programs are expected to significantly lower the cost of qualifying to purchase a new home. This is expected to shift buyer demand toward new builder projects, and put downward pressure on resale prices as buyers compare the affordability of new versus pre-owned options.

It should be interesting to see how these programs play out, especially since many builders have already put the brakes on new project launches due to slowdowns in the market. The resulting temporary supply gap, combined with government incentives to drive buyer interest, may mean there won’t be enough new homes in inventory to meet the demand – potentially setting the stage for an active and competitive market in 2026 and beyond.

PRO TIP: If you’re a first-time buyer hoping to take advantage of the federal and provincial rebates, connect with your agent now. This is the time to start talking to builders, so you can get a feel for what’s available before demand surges. Many new projects have slowed or been postponed due to the current market lull. By seeking early access to upcoming releases, you may benefit from better selection and more competitive pricing. For now, get pre-approved for financing, confirm your eligibility, and have your paperwork ready so you can move quickly when qualifying new builds hit the market. #Advice #AskDavid #TheNegotiator 

David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Moving? Get it right. Ask David today! Call or text 519-577-1212.