Buying Pre-Construction Under $1 Million in Ontario: Why 2026 Is Different

Updated October 23, 2026

For years, the $1 million mark has been an important psychological and financial threshold for Ontario home buyers.

In 2026, it matters even more.

A combination of new HST relief, expanded insured-mortgage rules, 30-year amortization options for qualifying new-build buyers, builder incentives and softer new-home market conditions has created a very different environment for buyers shopping below $1 million.

For qualifying buyers, a newly built home priced under $1 million can potentially provide benefits that simply weren’t available a few years ago.

But that doesn’t mean every home below $1 million is automatically a good deal.

The key is understanding why this price range matters—and how to compare the opportunities properly.

Why Is the $1 Million Price Point So Important in 2026?

Several major home-buying programs now intersect around the $1-million threshold.

For qualifying purchasers of new construction, these may include:

This makes the sub-$1-million new-home market particularly important for:

1. First-Time Buyers Can Potentially Receive Up to $50,000 in Federal GST/HST Relief

One of the biggest changes is the federal First-Time Home Buyers’ GST/HST Rebate.

For an eligible first-time buyer purchasing a qualifying new home valued at:

$1 million or less

the program can provide a rebate of up to:

$50,000

representing up to 100% of the federal 5% portion of HST.

For qualifying homes between:

$1 million and $1.5 million

the rebate gradually declines.

At $1.5 million or more, the federal first-time-buyer rebate is no longer available.

That makes the area at or below $1 million particularly important.

2. Ontario’s 2026 Enhanced HST Rebate Can Be Even Larger

Ontario also introduced the temporary Enhanced New Housing Rebate.

For qualifying purchases from a builder, the Agreement of Purchase and Sale generally needs to be entered into between:

April 1, 2026 and March 31, 2027.

For eligible homes valued up to $1 million, the Ontario enhancement can provide relief of up to:

$80,000

against the provincial 8% portion of HST.

Ontario has also introduced additional affordability relief connected to the remaining 5% portion for qualifying purchasers.

For the right buyer and transaction, the potential relief can therefore be substantial.

Can an Eligible Buyer Really Save Up to $130,000?

Potentially.

Consider a qualifying new home valued at:

$1,000,000

Ontario provincial portion:

8% = $80,000

Federal portion:

5% = $50,000

Total HST:

$130,000

Ontario and CRA examples confirm that qualifying transactions can potentially receive the benefit of both the $80,000 enhanced provincial rebate and up to $50,000 of additional relief, depending on the program and purchaser.

But this is extremely important:

Do not simply take a builder’s advertised $1-million price and subtract $130,000.

Many builder prices already assume certain HST rebates.

You need to determine:

The APS and your individual circumstances determine the real number.

3. The HST Advantage Isn’t Necessarily Limited to First-Time Buyers

This is another major difference in 2026.

The federal $50,000 program is specifically designed for qualifying first-time buyers.

But Ontario’s temporary enhanced new-housing measures are broader.

That means someone who has owned a home before may still potentially qualify for important Ontario new-home relief if the transaction meets the program conditions.

This creates opportunities for:

So if you hear:

“The new HST rebate is only for first-time buyers,”

that is an oversimplification.

There are different programs with different eligibility rules.

4. Mortgage Rules Are Also More Favourable Below $1 Million

HST isn’t the only reason the price point matters.

Canada’s insured-mortgage rules currently allow eligible purchasers to obtain mortgage insurance on properties priced below:

$1.5 million.

For homes between $500,000 and $1.5 million, the minimum down payment is generally:

5% on the first $500,000

plus

10% on the portion above $500,000.

This means buyers no longer automatically need a 20% down payment simply because the property costs $1 million or slightly more.

How Much Down Payment Would You Need?

Let’s look at several price points.

$600,000 New Home

First $500,000 × 5%:

$25,000

Remaining $100,000 × 10%:

$10,000

Minimum:

$35,000

$700,000 New Home

First $500,000:

$25,000

Remaining $200,000 × 10%:

$20,000

Minimum:

$45,000

$800,000 New Home

First $500,000:

$25,000

Remaining $300,000:

$30,000

Minimum:

$55,000

$900,000 New Home

First $500,000:

$25,000

Remaining $400,000:

$40,000

Minimum:

$65,000

$1 Million New Home

First $500,000:

$25,000

Remaining $500,000:

$50,000

Minimum:

$75,000

These figures illustrate the minimum equity formula for qualifying insured financing.

They do not include:

And the buyer still needs to qualify for the mortgage.

5. Builder Deposit and Mortgage Down Payment Are Different

This distinction is particularly important with pre-construction.

Suppose you buy an:

$800,000 home.

Your theoretical minimum insured-mortgage down payment might be:

$55,000.

But the builder requires:

10% deposit = $80,000.

You must follow the builder’s contract.

The builder deposit isn’t determined by federal mortgage minimums.

Now consider another builder offering:

5% deposit = $40,000.

That sounds easier.

And initially, it is.

But you may still need additional down-payment funds at final closing.

So:

Low Deposit ≠ Low Total Down Payment

Always calculate both separately.

6. 30-Year Amortizations Can Help New-Build Buyers

Another major affordability change involves mortgage amortization.

Qualifying purchasers of newly built homes may access insured mortgages with amortization periods of up to:

30 years.

A longer amortization can lower the required monthly mortgage payment.

For example, financing the same mortgage over:

30 years

instead of:

25 years

generally results in a lower monthly payment.

But there is a trade-off:

You generally pay more total interest over the life of the mortgage.

So a 30-year amortization improves monthly cash flow.

It doesn’t make the loan cheaper overall.

7. Builder Incentives Are Making Some Sub-$1M Homes More Competitive

Today’s slower new-home market has created more competition among builders in many Ontario communities.

Depending on the project, buyers shopping below $1 million may encounter:

This can make the effective purchase price very different from the headline number.

Example: $799,990 Townhome

Imagine a builder offers a new freehold townhome for:

$799,990

with:

Now compare it with a resale townhome for:

$760,000.

At first glance:

Resale wins by approximately:

$40,000.

But now consider:

The answer becomes less obvious.

8. Under $1 Million Doesn’t Automatically Mean Affordable

This is very important.

A home priced at:

$999,000

is not affordable simply because it qualifies for certain programs.

You still need to comfortably manage:

Never determine affordability solely from the minimum down payment.

A lender approving the mortgage doesn’t necessarily mean the monthly payment fits comfortably into your lifestyle.

9. Look Beyond the GTA Core

One reason the sub-$1-million market remains important is geography.

Depending on market conditions and housing type, buyers may find considerably different opportunities when moving beyond the most expensive GTA communities.

Areas worth comparing can include portions of:

Availability changes constantly.

Instead of asking:

“Where can I buy for under $1 million?”

ask:

“Where does my $1 million buy the strongest combination of home, location and future usability?”

10. Freehold Townhomes Can Be an Important Sweet Spot

For buyers seeking more space without detached-home pricing, freehold townhomes can be particularly attractive.

Potential benefits include:

In some Ontario markets, freehold towns remain available well below $1 million.

This can provide a middle ground between:

Condominium affordability

and

Detached-home lifestyle.

11. Semi-Detached Homes May Be Worth Comparing Too

Buyers sometimes assume a semi-detached home will be dramatically more expensive than a townhome.

That isn’t always the case.

In a slower market, builder incentives and community pricing can narrow the difference.

Suppose:

Townhome

$749,000

Semi-detached

$799,000

Difference:

$50,000

For that difference, the semi may provide:

That doesn’t automatically mean the semi is better.

But buyers should compare the next housing category up before deciding.

12. Don’t Ignore Detached Homes Just Because Your Budget Is Under $1 Million

Depending on the Ontario market, builder inventory, release and incentive program, detached-home opportunities can sometimes appear below the $1-million threshold.

They may be found in:

If detached living is your long-term goal, don’t automatically assume it is impossible.

Search first.

13. Inventory Homes Can Be Particularly Attractive Below $1 Million

A builder may have completed or nearly completed homes that need buyers.

These can include:

Inventory can sometimes come with:

For a buyer who already has their down payment available, an inventory home can provide:

New construction without the multi-year wait.

14. But Traditional Pre-Construction Gives You More Time to Save

Suppose you buy in 2026 and close in:

2028.

That gives you more time to:

For buyers whose income is strong but current savings are limited, this can be extremely useful.

15. First-Time Buyers Should Consider the FHSA

The First Home Savings Account can be particularly useful when buying pre-construction.

Eligible first-time buyers can contribute to an FHSA and potentially receive:

A longer pre-construction timeline can give buyers additional time to build these savings before closing.

16. The Home Buyers’ Plan Can Also Help

Eligible purchasers may also access the federal Home Buyers’ Plan, which allows qualifying withdrawals from RRSP savings toward a home purchase.

Used together, a qualifying buyer may potentially combine:

FHSA

Home Buyers’ Plan

Personal Savings

to build the necessary down payment.

These programs have their own eligibility rules and should be considered as part of a broader financial plan.

17. First-Time Buyers May Also Receive Ontario Land Transfer Tax Relief

Ontario provides eligible first-time homebuyers with a Land Transfer Tax refund of up to:

$4,000.

This is separate from HST relief.

So a qualifying first-time buyer of a brand-new home may potentially benefit from several different programs.

These shouldn’t be lumped together as one “government rebate.”

Each program has separate rules.

18. Don’t Count Government Rebates Twice

This is a common mistake.

Suppose the builder’s price list states:

$799,990

and includes fine print indicating that applicable HST rebates have already been incorporated.

The buyer sees a government announcement about HST relief and thinks:

“Great—I can subtract another $100,000.”

Not necessarily.

Always determine whether the advertised price is:

Before the rebate

or

After the assumed rebate.

This can completely change your calculation.

19. Compare Effective Price, Not Advertised Price

Suppose:

Project A

Price:

$749,000

Minimal incentives.

Uncapped development adjustments.

Project B

Price:

$775,000

Includes:

Project B could potentially offer better overall value even though the headline price is higher.

Use this calculation:

Builder Price

− Genuine Builder Discounts

− Applicable Government Relief

That is the number you should compare.

20. Don’t Forget Closing Costs

Buying below $1 million doesn’t eliminate closing costs.

You may still need funds for:

Your deposit is not your closing-cost reserve.

Keep those funds separate.

Example: $700,000 New Home

Let’s put several pieces together.

Purchase price:

$700,000

Minimum insured down payment for an eligible borrower:

$45,000

Suppose builder requires:

10% = $70,000

paid over 18 months.

Ontario Land Transfer Tax:

Approximately:

$10,475

Eligible first-time-buyer maximum LTT refund:

$4,000.

Then the buyer must consider:

This is why:

“I can afford the deposit”

is not the same as:

“I can comfortably afford the home.”

Example: $800,000 New Home

Purchase price:

$800,000

Minimum insured down payment:

$55,000

Example builder deposit at 10%:

$80,000

Ontario Land Transfer Tax:

Approximately:

$12,475

Potential first-time-buyer provincial refund:

Up to $4,000

Potential HST relief:

Depends on buyer eligibility and transaction structure.

The buyer should therefore budget beyond the initial $80,000 deposit.

Example: $999,000 New Home

Now consider a home at:

$999,000.

The minimum insured-mortgage formula would require approximately:

First $500,000:

$25,000

Remaining $499,000 × 10%:

$49,900

Total:

$74,900

before closing costs and mortgage-insurance considerations.

For qualifying buyers, this price also sits within the range where the federal first-time-buyer rebate can provide up to 100% of the federal portion and Ontario’s enhanced provincial relief can potentially apply at its maximum level.

This is why pricing immediately below $1 million deserves particular attention in 2026.

Does This Mean You Should Always Stay Below $1 Million?

No.

Don’t reject a significantly better home solely because it costs:

$1,020,000

instead of:

$999,000.

The federal first-time-buyer rebate doesn’t instantly disappear at $1 million.

It gradually phases out between:

$1 million and $1.5 million.

Ontario’s enhanced rebate also has its own price structure.

The $1-million threshold is important.

It shouldn’t override everything else.

Location Still Matters More Than a Rebate

A rebate can improve a purchase.

It cannot fix a poor location.

When comparing homes under $1 million, consider:

Saving $30,000 upfront isn’t necessarily beneficial if you buy a property that doesn’t fit your long-term needs.

Builder Reputation Still Matters

Price should never replace due diligence.

Before buying:

An unusually cheap home can be an excellent opportunity.

Or it can simply be cheap.

Know the difference.

Who Should Consider a Sub-$1M New Home in 2026?

This segment may be particularly attractive for:

First-time buyers

Because of federal and provincial programs.

Young families

Especially those comparing condos with freehold townhomes.

Buyers who need time to save

Extended builder deposits can help.

Buyers priced out of central GTA markets

Other Ontario communities can offer more space.

Move-up buyers

Ontario’s enhanced relief isn’t necessarily restricted only to first-time purchasers.

Buyers wanting brand-new construction

Warranty and reduced immediate maintenance can add value.

Who Should Still Be Cautious?

A sub-$1-million home may not be right if:

The government program should improve a strong purchase.

It should not justify a weak one.

A Smarter Strategy for Buying Under $1 Million

Instead of searching only:

“Homes Under $1M”

use these filters:

1. Maximum comfortable monthly payment

2. Total cash available

3. Preferred home type

4. Maximum commute

5. Minimum bedrooms

6. Parking requirement

7. Closing timeline

8. HST eligibility

9. Builder incentives

10. Comparable resale value

That creates a much more useful search.

Frequently Asked Questions

Why is buying below $1 million different in 2026?

Because several current affordability measures are particularly strong at or below this price point, including maximum federal first-time-buyer GST/HST relief and maximum Ontario enhanced provincial relief for qualifying transactions.

Can a first-time buyer get $50,000 back?

An eligible first-time buyer purchasing a qualifying new home valued at or below $1 million may receive up to $50,000 under the federal First-Time Home Buyers’ GST/HST Rebate.

Can Ontario buyers also receive $80,000?

Qualifying purchasers under Ontario’s Enhanced New Housing Rebate can potentially receive up to $80,000 of provincial HST relief.

Is the rebate automatically $130,000?

No. The amount depends on the purchaser, transaction, home value and applicable programs. Builder pricing may also already incorporate assumed rebates.

Do you need 20% down on a $1-million home?

Not necessarily. Eligible insured financing is available below the $1.5-million threshold, subject to borrower and property requirements.

What is the minimum down payment on a $1-million home?

Under the current insured-mortgage formula, it is generally $75,000 for an eligible borrower.

Can new-home buyers use a 30-year mortgage?

Qualifying purchasers of newly built homes may access insured mortgages with amortization periods of up to 30 years.

Do repeat buyers qualify for the enhanced Ontario rebate?

Potentially, yes. Ontario’s temporary Enhanced New Housing Rebate follows its applicable new-housing eligibility framework and is not structured solely as a first-time-buyer program. Individual eligibility should be confirmed.

Are resale homes eligible for these new-home HST rebates?

Ordinary resale purchases are generally treated differently because the programs discussed here relate to qualifying new or substantially renovated housing.

The Bottom Line: Why Under $1 Million Matters in 2026

For Ontario new-home buyers, 2026 is not a normal year.

Qualifying buyers shopping at or below $1 million can potentially benefit from a combination of:

But affordability isn’t created by one rebate.

The right calculation is:

Price

Then ask:

Can I comfortably afford this home long term?

If the answer is yes, 2026 may offer particularly interesting opportunities for buyers looking below the $1-million mark.

Looking for New Homes Under $1 Million in Ontario?

At New Home Source, we help buyers compare new-home opportunities based on more than the advertised starting price.

Tell us your:

Budget + Preferred Location + Home Type + Closing Timeline

and we can help you explore:

Whether your budget is $500,000, $700,000, $800,000, $900,000 or up to $1 million, the goal is to identify the strongest combination of price, location, incentives and long-term value.

Contact New Home Source to explore current new-home opportunities under $1 million across Ontario.

Disclaimer: This article is provided for general informational and real-estate marketing purposes only and does not constitute legal, tax, mortgage, financial or investment advice. Government programs, builder pricing, incentives and mortgage requirements can change. HST rebate eligibility is transaction-specific. Buyers should obtain independent legal, mortgage and tax advice before relying on any rebate or entering into an Agreement of Purchase and Sale.