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The province is planning to temporarily remove Harmonized Sales Tax (HST) for buyers of new homes.
Premier Doug Ford announced the plan Wednesday at a news conference in Mississauga, saying the full 13 per cent tax will be removed for new homes valued up to $1 million from April 1, 2026 to March 31, 2027.
“For too many families, the dream of home ownership is being pulled out of reach by high costs and economic uncertainty,” said Ford.
Taxes, development fees and other costs add hundreds of thousands of dollars to the cost of a new home, said Ford.
The release said eligible buyers could receive up to $130,000 from the rebate, which will be included in the upcoming provincial budget.
The maximum rebate will be available for homes valued up to $1.5 million and then proportionally decrease to a rebate of $24,000 for homes valued at $1.85 million or more, said the release.
The Ontario government announced it will eliminate the provincial portion of HST for some first-time home buyers. CBC’s Clara Pasieka breaks down the details.
“[This] could stimulate an additional 8,000 housing starts in Ontario next year, supporting up to 21,000 jobs and boosting Ontario’s GDP growth by $2.7 billion,” said the province.
Ford repeated ahead of the budget his government “will never, ever raise a tax.”
“Government doesn’t have an income problem, it has a spending problem,” he said, adding the province is “laser focused” on keeping costs down across sectors, including housing, transit and gas.
If he were a potential homebuyer, he would buy a new home and “do it right away,” said Ford.
“Please get everything together, you have one year … talk to your bankers and start buying the homes,” he said.
Ford said the announcement was like a large retail sign that said 13 per cent off and that “people are hungry” to get into the market.
He said the new measures will hopefully help “kick start the construction sector.”
Who is eligible for the HST break?
Eligible buyers must meet the following conditions, according to the province’s release:
- Purchase agreement is signed with a buyer between April 1, 2026 and March 31, 2027.
- Homes bought as a primary residence must have construction begin on or before December 31, 2028 and be completed on or before December 31, 2031.
- Homes bought as a rental property must have construction completed on or before December 31, 2029.
Other eligibility criteria will be posted on the province’s website by the end of March.
Ford said the full HST will be covered — including the federal five per cent portion — thanks to a partnership with the federal government.
The federal government has agreed to split costs with Ontario until legislation passes to cover the federal HST portion for new homes.
That’s a move Ontario says would provide nearly $2.2 billion in tax relief for provincial housing.
This announcement comes after the provincial and federal government’s existing HST rebate for first-time buyers of new homes valued up to $1 million.
The province is taking a “massive step forward” to get more shovels in the ground to build new homes faster, said Minister of Municipal Affairs and Housing Rob Flack in a news release.
“Homeownership is a cornerstone of Ontario’s economic success,” he said. “Ontario thrives only when its people thrive.”
“Here in Ontario, we do not believe in raising taxes,” said Finance Minister Peter Bethlenflavy said at the news conference.
He estimated the measure will spark an additional 8,000 housing starts, at a time when the most recent government projections show the province building 70,000 new homes this year, far off the pace needed to meet a goal of 1.5 million homes ny 2031.
