If you're comparing a brand-new downtown condo with a resale unit in a building finished two or three years ago, the most important number this year isn't on the listing. It's the date on the builder's agreement of purchase and sale. Ontario's expanded HST relief for owner-occupiers applies to agreements signed with a builder between April 1, 2026, and March 31, 2027. A resale unit never carried HST in the first place. For the next six months, those two facts reshape the comparison that most CityPlace, St. Lawrence and Harbourfront buyers start from: price per square foot.
The asking prices show a record gap. The prices people actually pay show a much smaller one.
What The Relief Covers, And Who It Leaves Out
There are two pieces. The Ontario Enhanced New Housing Rebate covers the 8% provincial part of the HST. It's a full rebate on homes up to $1 million, a flat $80,000 from $1 million to $1.5 million, a partial rebate above that, and nothing extra at $1.85 million or more. The Ontario New Home Affordability Payment, run by the province, adds up to $50,000 toward the 5% federal part for people who qualify for the provincial rebate. Together they can cover the full 13% HST on an eligible home valued up to $1 million.
Three conditions matter most for a condo buyer:
- You have to buy from the builder. The rebate covers condominium units bought from a builder. Completed, unsold inventory counts, not just pre-construction.
- It has to be a primary residence. The unit has to be your primary residence or a relation's.
- The agreement date decides it. For builder purchases, the rebate depends on when the agreement is signed, not on when you move in.
The Province first proposed this relief for first-time buyers only, in October 2025. The March 2026 expansion opened it to all eligible buyers. If you're a downsizer who has owned a house in Riverdale for twenty years, you can be eligible on the same terms as a 30-year-old buying a first place. The program is temporary, and your accountant and the CRA's own pages decide whether you qualify. This post explains how the market works. It doesn't give tax advice.
Four Prices For The Same Square Foot
Urbanation tracks the Greater Toronto and Hamilton Area condo market every quarter. Its Q2 2026 numbers show why one "new versus resale" figure can mislead you. These are region-wide figures, but the way they relate to each other holds for any downtown tower with unsold units left.
| What was measured, Q2 2026 | Average price per sq. ft. |
|---|---|
| Asking price, completed and unsold new condos | $1,186 |
| New condos actually sold to individual buyers | $1,008 |
| Resale units in buildings registered within the past three years | $830 |
| Bulk sales of five or more units to investors | $773 |
The $1,186 asking price is 43% above recent resale, the widest gap Urbanation has recorded. The $1,008 figure comes from Shaun Hildebrand, Urbanation's president, speaking to the Toronto Star about what individual buyers actually paid in the same quarter. On those numbers, roughly 15 points of the headline premium disappear before tax even enters the picture.
Why The Asking Gap Widened When It Was Supposed To Shrink
In April, Urbanation counted a 38% asking premium for new units over recent resale. It estimated the rebate could cut that to about 20%. By July, the asking premium had grown to 43%.
The explanation is in Urbanation's Q2 release. While developers waited for the rebate rules, which weren't confirmed until June, asking prices on completed units dropped only 2% from a year earlier. Meanwhile, the deals that did close came in well below asking, because some developers got more aggressive about cutting prices and negotiating after the HST announcement. Asking prices barely moved, and the negotiation happened at the table. That's why the advertised gap and the real gap moved in opposite directions.
Hildebrand cautions against reading this as a fire sale. "There is no broad capitulation on price," he told the Star. He added that most developers are holding completed units as rentals and waiting for the supply pipeline to thin out. For a buyer, that means the negotiating room depends on the building. A developer holding units as rentals is under less pressure than one that wants to close out a project.
Who Else Is Shopping That Inventory
Individual buyers aren't the only ones calling sales offices. In Q2, seven bulk purchases made up 204 of the region's 702 new condo sales, about 30%.
The closest downtown example is Jesta Group, a Montreal-based, family-owned real estate firm. It bought about $30 million of unsold units in a recently completed building near Toronto Metropolitan University and plans to buy $500 million more over the next year. A confidentiality agreement keeps the building's name private. Anthony O'Brien, Jesta's senior managing director, said the HST rebate "allowed us to do the transaction." The firm plans to rent the units out until the market recovers, which it expects in three to five years. Further north, High Art Capital paid $22.3 million for 43 unsold units at Line 5 near Yonge and Eglinton, about $797 per square foot.
The useful detail for you is what Jesta passes on. O'Brien said the firm avoids very small studios and units with a "buried bedroom," meaning a glass wall looking into the living room. He called them unlivable for renters and for any future buyer. Professional buyers are taking the well-designed layouts in bulk. What's left in a building's unsold stock is often the layouts they skipped. Price per square foot doesn't capture that, but a floor plan does.
What This Means For The Nearly-New Unit Down The Hall
The resale side has thinned out instead of piling up. In Q2, active resale condo listings across the region fell 21% from a year earlier to 7,105, a three-year low, while developer-held completed inventory hit a record 5,001 units. Small units aren't flooding the market either. Units under 600 square feet were 20.4% of resale listings, down from 24.3% in 2024.
Downtown, TRREB's Q2 2026 condo report shows C01 with 756 sales at an average of $725,499, 1,099 active listings, and 34 average days on market. Across the City of Toronto in August 2026, 885 condo apartments sold at an average of $651,648, down 2.1% from a year earlier on almost the same number of sales. As of today, TRREB hasn't published its September figures.
If you own a unit in a building registered in the last few years, you're competing on price with tax-relieved units from the builder, often in the same building. Your advantages are a layout buyers have already seen, a building with an operating history, and a sale that doesn't depend on whether the buyer qualifies for a rebate. In a listing, a floor plan and an honest write-up of the building's track record carry more weight than they did two years ago.
Comparing Like For Like Before March 31, 2027
- Ask for the negotiated price. On a completed new unit, the asking price is the starting point for a negotiation, and in Q2 the average closed price was about $180 per square foot below it.
- Confirm how the builder handles the rebate. Your eligibility depends on your agreement date, the price, and whether the unit will be your or a relation's primary residence. Check the details against CRA Notice 346 before you sign.
- Check the price bands. Full relief applies up to $1 million. Above that, the provincial rebate is a flat $80,000, then partial above $1.5 million, and there's no enhanced relief at $1.85 million or more.
- Judge the floor plan on its own terms. Look for buried bedrooms and very small studios, the layouts investors are passing on.
- Price the resale unit's history. A building registered two or three years ago has a track record you can look into. A brand-new building doesn't yet.
- Keep the clock in mind. A builder agreement signed on April 1, 2027, falls outside the current window.
FAQ
Does the rebate apply if I'm buying the new unit as a rental?
Not the owner-occupier version. Landlords use a separate Ontario rental rebate with its own conditions, and the federal purpose-built rental rebate doesn't apply to individually owned condo units.
What about the federal first-time buyer rebate?
It still exists for eligible first-time buyers of new homes. It covers the federal portion in full up to $1 million and phases out by $1.5 million. The Ontario payment is reduced by any federal rebate you receive, so you can't recover the same tax twice.
Are rents holding up if I ever need to lease the unit?
In Q2 2026, condo leasing across the region hit a record 18,923 leases. Average rent was down 1.3% from a year earlier but up 2.5% from the previous quarter, to $3.74 per square foot. TRREB's downtown core one-bedroom rent was $2,420 in Q2 2026, compared with $2,440 a year earlier.
If you're weighing a new downtown unit against a nearly-new resale before the March 31 deadline, Derek Ladouceur can line them up side by side, comparing negotiated price, floor plan and building history, so you're not just comparing asking prices. Book a showing, or if you're selling a recently built unit, request a free home valuation that accounts for the new units competing with yours.
