In Ontario, residential resale homes are generally exempt from HST. Unlike pre-construction properties where the 13% Harmonized Sales Tax is a standard addition to the purchase price, the price you negotiate for a "used" home is typically the final price. However, exceptions exist for homes that have undergone substantial renovations or properties used primarily for short-term rentals.
The Deep Dive: Understanding the "Used Residential" Exemption
The primary reason you don't pay HST on a resale home in Oakville is that the tax has already been paid and "captured" by the government during the home's initial sale as a new build. Under the Excise Tax Act, once a home has been occupied as a residence, it is classified as a "used residential complex," making subsequent sales exempt.
However, as we move through 2026, savvy buyers in the Halton Region must be aware of critical "gray areas" where the CRA may deem a resale property taxable:
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The 90% Substantial Renovation Rule: If a seller has "gutted" a home replacing 90% or more of the interior (excluding the foundation and structural walls) the CRA may legally treat the sale as a brand-new build, triggering HST on the full purchase price.
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Commercial or Short-Term Use: If a property in neighborhoods like Bronte or Old Oakville was used exclusively for short-term rentals (like Airbnb) rather than a primary residence, its tax-exempt status may be compromised.
Budgeting for Closing Costs
While the home price itself is usually exempt, remember that HST does apply to almost all professional services involved in your transaction. You should budget for 13% tax on the following:
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Real Estate Commissions: Usually paid by the seller but subject to HST.
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Legal Fees: Your real estate lawyer will charge HST on their professional services.
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Home Inspections: A standard requirement for homes in premium areas like Joshua Creek.
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Appraisals & Moving Services: Essential costs that are always taxable.
Local Nuance: The Oakville Market Advantage
In the 2026 Oakville market, we are seeing a "Strategic Equilibrium." With the average detached home in areas like Glen Abbey or Southeast Oakville often exceeding $1.5M, the HST exemption represents a massive saving. On a $2M resale estate, avoiding HST saves a buyer $260,000 compared to a new-build equivalentmcapital that can instead be used for personalized upgrades.
Furthermore, with new mortgage rules allowing 30-year amortizations on homes up to $1.5M, the tax-free nature of resale homes makes them the most accessible path for families looking to enter Oakville’s top school catchments without the immediate tax "sticker shock" of the pre-construction sector.
Ready to Navigate the Oakville Market?
The 2026 market offers a unique window of opportunity for buyers and sellers alike. Whether you are looking to capitalize on tax-exempt resale inventory in Joshua Creek or list your luxury estate in Bronte, you need a strategy backed by decades of local data.
Contact Martin Group today to secure your advantage in the Halton Region.
"Profit from our experience."
