The Ontario government has unveiled a temporary tax relief measure aimed at reviving the province’s slowing housing sector, with Premier Doug Ford announcing the removal of the Harmonized Sales Tax (HST) on new homes for a limited period.
Speaking at a press conference in Mississauga on March 25, Ford said the full 13 percent HST will be eliminated on newly built homes priced up to $1 million. The measure will take effect from April 1, 2026, and remain in place until March 31, 2027.
Under the plan, homes valued between $1 million and $1.5 million will qualify for a rebate capped at $130,000. The rebate will gradually decrease for higher-priced homes, with properties worth up to $1.85 million still eligible for a partial rebate of up to $24,000.
The initiative is set to be formally included in the provincial budget, scheduled for release on March 26 at Queen’s Park.
Ford framed the move as a direct response to affordability challenges faced by many residents. “For too many families, home ownership is slipping out of reach due to rising costs and economic uncertainty,” he said, describing the tax cut as similar to a limited-time discount aimed at encouraging buyers to enter the market.
The premier expressed confidence that the incentive will stimulate demand and accelerate home construction across the province. According to government estimates, the policy could lead to an additional 8,000 housing starts by 2027, create more than 20,000 construction-related jobs, and contribute approximately $2.7 billion to Ontario’s economy.
The new measure expands on Ontario’s 2025 housing affordability strategy, which previously offered an 8 percent provincial rebate targeted at first-time homebuyers. The updated plan broadens eligibility to include all buyers and, through cooperation with the federal government, removes the full HST rather than only the provincial portion pending federal legislative approval.
Ford also urged municipalities to take further steps to reduce housing costs, pointing to local taxes, development charges, and fees as major contributors to high home prices. He called on city governments to lower these costs to support increased construction and affordability.
To qualify for the rebate, buyers must sign purchase agreements between April 1, 2026, and March 31, 2027. The property must be used either as a primary residence or as a rental unit for residential purposes.
Construction timelines have also been outlined. Homes intended as primary residences must begin construction by the end of 2028 and be completed by the end of 2031. For rental properties, construction must be completed by the end of 2029.
The provincial government has indicated that further details regarding eligibility requirements will be made available on its official website before the end of the month.
The announcement marks one of the most significant recent interventions by the Ontario government in the housing market, as policymakers attempt to address affordability concerns and stimulate new development.
