Tax exemption boosts new home sales in Ottawa

Ottawa —
Home builders in Ottawa said that sales offices in new residential projects have started to see increased activity, with more buyers taking advantage of a new tax exemption on home purchases.

A report by the Greater Ottawa Home Builders' Association showed that 744 new homes were sold in April, an increase of more than 160% compared to the previous month.

This increase is linked to a federal and provincial tax exemption program that came into effect in the same month, reducing the HST on new home sales in Ontario, equivalent to a discount of up to 13% of the sale price, with a maximum of $130,000.

Industry representatives said the measure encouraged a number of buyers who were hesitant or close to making a purchase decision to sign actual contracts.

The Greater Toronto Area witnessed similar growth in new home sales during April, indicating that the impact of the tax exemption is not limited to Ottawa alone.

Those working in the construction market believe that reducing the direct cost at purchase may help stimulate demand, especially among first-time buyers, at a time when home prices and borrowing costs still pose a significant barrier for many families.

However, experts warn that a rise in sales in one month does not necessarily mean a full market recovery, as the pace of construction remains linked to other factors such as interest rates, material costs, labor availability, and the speed of permit issuance.

This surge in sales comes amid an ongoing housing crisis in Canada, where governments are trying to use tax and financing tools to encourage construction, increase supply, and reduce pressure on buyers.