MISSISSAUGA — The Government of Ontario, led by Doug Ford, has announced a major temporary tax relief plan that will eliminate the 13% HST on new homes for one year, aiming to boost affordability and revive the struggling construction sector.
The measure will apply to new home purchases made between April 1, 2026 and March 31, 2027, and is expected to be formally included in the province’s upcoming budget.
Under the plan, buyers purchasing new homes valued up to $1 million will receive the full HST rebate, while homes priced between $1 million and $1.5 million will qualify for a maximum rebate of up to $130,000, gradually decreasing for higher-priced homes.
“This could stimulate an additional 8,000 housing starts, support up to 21,000 jobs, and boost Ontario’s GDP by $2.7 billion,” Ford said, emphasizing that high taxes and development costs have pushed homeownership out of reach for many families.
The initiative is being rolled out in partnership with the federal government, which has agreed to share costs related to the federal portion of the HST. Ontario estimates the program will deliver approximately $2.2 billion in tax relief.
Eligibility will depend on several conditions, including that the purchase agreement is signed within the one-year window and that construction timelines meet specified deadlines. Homes must be intended as a primary residence or meet criteria for rental properties.
Ontario Minister of Housing Rob Flack called the move a “massive step forward” to accelerate homebuilding, while Finance Minister Peter Bethlenfalvy said the policy reflects the government’s commitment to affordability without raising taxes.
Industry leaders have welcomed the announcement. The Building Industry and Land Development Association described the rebate as a “game changer,” saying it could help reverse declining housing starts and encourage developers to launch new projects.
However, even with this measure, Ontario remains far behind its ambitious goal of building 1.5 million homes by 2031, with current projections estimating around 70,000 new builds this year.
With rising costs continuing to pressure buyers, the government is positioning this tax break as a limited-time opportunity to re-enter the housing market — and a signal to developers to “get shovels in the ground” quickly.