Part 1: Beating the Math:  Why Politicians Are Failing Homebuyers and What you can do.

If you are trying to buy a house in Canada right now, the math is completely broken. Instead of treating the root causes of the housing crisis, politicians are serving up PR stunts that do very little to actually put keys in the hands of hardworking Canadians. Let’s look at the reality of the situation.

The HST Discount Reality Check

There has been a lot of government buzz around temporary tax discounts on new home purchases. On March 25, 2026, the Ontario government announced a temporary expansion of the Harmonized Sales Tax (HST) rebate. This new proposal promises to eat up the entire 13% HST (the 8% provincial and 5% federal portions) for all buyers, up to a maximum rebate of $130,000 for homes priced up to $1 million.

While a $130,000 savings sounds fantastic on paper, here is why it will do very little to make housing truly affordable: It doesn’t solve the core issue. The buyer still has to qualify for a massive mortgage at punishing stress-test rates. Furthermore, history shows us that when governments offer tax breaks on new builds, developers often just bake that margin into the base price of the home anyway. It is a temporary band-aid for an industry that is structurally broken.

The Condo Glut & The Pre-Construction Nightmare

While Ottawa tinkers with temporary tax rebates, we have a massive condo glut causing havoc across the country. Buyers who purchased pre-construction condos a few years ago cannot close on them because property values have plummeted 15% to 25%.

If you bought a pre-con condo for $600,000 in 2022, and the bank appraises it at $480,000 today, the lender only funds the lower value. Buyers are being forced to miraculously come up with $120,000 in cash just to close, or forfeit their deposits and get sued. This glut is destroying financial futures and paralyzing developers.

When someone loses, somebody else wins.

The flipside of the condo collapse is new buyers can come in and buy at depreciated prices. It’s not fair but that’s a reality.  For those looking to buy, I would suggest now is a good time to jump in.  

Real Policy Solutions to Stimulate the Market

If the government actually wants to fix this, they need to stop the war on investors and inject capital back into the market:

• Lift the Foreign Buyer Ban for the U.S.: The blanket ban on foreign buyers was not a well thought out policy.  I would argue it was a knee jerk reaction. We need to eliminate it, specifically for the United States. The U.S. is our biggest trading partner, regardless of what anyone thinks of Donald Trump. Allowing Americans to buy vacation homes or investment properties here will inject massive amounts of capital, stabilize the crashing condo sector, and create desperately needed construction jobs.
• End the War on Airbnb: The short-term rental ban in places like Toronto was total overkill. Another ill-advised policy.  A recent study showed that short-term rentals account for just 0.70% of all housing units in Canada. Less than 1%! Banning them didn’t fix the housing shortage; it just gave developers another reason to cancel new construction projects because investors walked away.

Sources & Data References:

• Ontario HST Relief Details: Ontario Bar Association
• Housing Starts & Condo Data: Canada Mortgage and Housing Corporation (CMHC)

I hope you will enjoy this article and if you have any questions or would like to discuss I am always available.

Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.

Steve Garganis: 416-224-0114; steve@canadamortgagenews.