The provincial government has unveiled a plan to temporarily eliminate the Harmonized Sales Tax (HST) for purchasers of new homes. Premier Doug Ford made the announcement during a press event in Mississauga, revealing that the complete 13 percent tax would be waived for new homes valued at up to $1 million from April 1, 2026, to March 31, 2027.
Under this temporary initiative, homes valued up to $1.5 million would be eligible for the maximum $130,000 rebate, with the rebate decreasing proportionally for homes valued up to $1.85 million, which would qualify for a $24,000 rebate. The details of this rebate will be outlined in the upcoming provincial budget.
Ford emphasized the significance of this move in making homeownership more accessible, highlighting the financial burdens posed by taxes, development fees, and other expenses that significantly raise the cost of new homes. The government projects that this initiative could trigger an additional 8,000 housing starts in Ontario next year, supporting up to 21,000 jobs and boosting the province’s GDP growth by $2.7 billion.
The eligibility criteria for the HST exemption include signing a purchase agreement between April 1, 2026, and March 31, 2027, for primary residence homes with construction commencing on or before December 31, 2028, and completed by December 31, 2031. Homes purchased for rental purposes must have construction completed by December 31, 2029. Additional eligibility details will be provided on the province’s website by the end of March.
Ford assured that the full HST, including the federal five percent portion, would be covered through a partnership with the federal government until legislation is enacted to cover the federal HST component for new homes. This collaboration is estimated to deliver nearly $2.2 billion in tax relief for provincial housing. Ford did not disclose specifics about the negotiation process with the federal government but mentioned that discussions began several months ago.
In response to this initiative, industry stakeholders like the Building Industry and Land Development Association (BILD) president, David Wilkes, hailed the move as a “game changer,” addressing the affordability challenges faced by homebuyers due to government taxes. Developers are expected to explore innovative approaches to attract potential buyers in the open market.
Overall, the government aims to accelerate housing construction, boost the economy, and enhance affordability by promoting a competitive housing market through these strategic measures.