Buying in 2026? 3 Hidden Financial Traps (and Opportunities) in Your Closing Process
If you are planning to enter the Ontario real estate market in 2026, you are stepping into a landscape that looks very different from just two years ago. With inventory levels up and prices stabilizing, buyers finally have some leverage. But new government incentives and stricter tax rules mean the paperwork has arguably never been more complex.
Here are the three critical updates every 2026 buyer needs to know to protect their wallet on closing day.
1. The "Bill C-4" GST Rebate Gap
The federal government’s Making Life More Affordable for Canadians Act (Bill C-4) is the headline news for buyers of newly built homes. If passed, this legislation will eliminate the GST (the 5% federal portion of the HST) on new homes valued under $1 million. For a condo priced at $800,000, that is a saving of $40,000.
The Catch: As of early 2026, this legislation is still moving through the final stages of the Senate. This creates a "cash flow gap." Because the bill has not yet received Royal Assent, builders cannot yet credit this rebate to you on the day of closing.
Depending on the specific wording of your agreement of purchase and sale, this means you may be required to pay the full HST amount on closing day, and then apply to the Canada Revenue Agency for a refund once the law passes. When we review your builder agreement, we will check specifically for how this rebate is handled to ensure you aren't caught short on funds.
2. The 30-Year Mortgage & Closing Delays
To help with monthly affordability, eligibility for 30-year mortgage amortizations has been expanded to include all first-time homebuyers and all buyers of new construction homes. This is a powerful tool to lower your monthly payments.
However, lenders are still adjusting their systems to these new rules. We are seeing financing approvals take longer than the standard 5 business days. This is dangerous because of the "Time is of the Essence" clause in your purchase agreement. Recent Ontario court decisions, such as VanderMolen Homes Inc. v. Mani, have reaffirmed that missing a closing deadline—even by a day—can result in the loss of your deposit and a lawsuit for damages.
If you are relying on the new 30-year amortization rules, ensure your financing condition allows for sufficient time to secure your financing.
3. The New 3% Vacant Home Tax Risk
The "Statement of Adjustments" is the balance sheet that calculates exactly what you owe the seller on closing day. In 2026, a new line item requires your attention: the Vacant Home Tax (VHT).
Toronto has increased the VHT rate to 3% of the property’s assessed value. The deadline to declare the property's occupancy status for 2025 is April 30, 2026.
The risk for buyers is inheriting a tax bill. If you buy a home in February or March, and the seller fails to make the declaration before they leave, the City may deem the home vacant and impose the VHT on the property tax account. On a $1 million home, that is a $30,000 penalty that could become your problem.
We now require sellers to provide a Statutory Declaration confirming they have filed their VHT declaration, ensuring you don't inherit their tax debt.
The Bottom Line
The 2026 market offers opportunities, like the new GST rebate and extended mortgages, but it also presents new administrative risks. Whether it’s preserving your right to a rebate or ensuring you aren't inheriting a tax liability, the details in the legal documents matter more than ever.