MISSISSAUGA, ON – March 25, 2026 – In a significant move to improve housing affordability and stimulate economic growth, the Ontario government has announced a major expansion of the Harmonized Sales Tax (HST) rebate for new homes. The proposal, set to be detailed in the upcoming 2026 Budget, aims to save homebuyers up to $130,000 by removing the full 13% HST on eligible new homes.
The initiative, developed in partnership with the federal government, is designed to lower the financial barrier to homeownership, encourage new housing starts, and support jobs amid ongoing economic challenges.
Key Details of the HST Rebate Expansion
Under the proposed changes, eligible buyers of new homes valued up to $1 million would see the full 13% HST removed, resulting in a maximum rebate of $130,000. This maximum rebate amount will be maintained for homes valued up to $1.5 million. For properties above that threshold, the rebate will decrease proportionally, bottoming out at a maximum of $24,000 for homes valued at $1.85 million or more.
This expansion builds on the previous federal-provincial move to rebate the HST for first-time buyers of new homes up to $1 million.
The relief is designed as a temporary one-year measure, effective from April 1, 2026, to March 31, 2027.
Economic Impact: Jobs, GDP, and Housing Starts
The provincial government projects that the expanded rebate will have a substantial economic impact. Officials estimate the policy could stimulate an additional 8,000 housing starts in Ontario next year. This construction activity is expected to support up to 21,000 jobs and contribute $2.7 billion to Ontario’s GDP.
“In the face of tariffs and economic uncertainty, our government is working closely with the federal government to do everything we can to lower costs for families, keep workers on the job and build the most competitive, resilient and self-reliant economy in the G7,” said Premier Doug Ford. “Today’s announcement will provide meaningful and significant relief to the people of Ontario, helping thousands more families realize the dream of homeownership and boosting Ontario’s economy by $2.7 billion.”
A Cost-Sharing Partnership with the Federal Government
The financial framework of the relief is supported by a cost-sharing agreement with the federal government. Ottawa has agreed to cover approximately the five per cent federal portion of the HST being removed on new homes in Ontario, subject to the passage of federal legislation.
This partnership is expected to provide nearly $2.2 billion in total joint tax relief for the housing sector in Ontario.
“Ontarians have seen costs increase as a result of ongoing economic uncertainty, so it is more important than ever that we continue to keep costs down to make life more affordable for families and individuals,” said Peter Bethlenfalvy, Minister of Finance. “With this enhancement and expansion of the HST rebates, we are supporting home affordability while providing relief to hardworking Ontario families on one of the biggest financial transactions of their lives.”
A Suite of Measures to Boost Housing Supply
The HST rebate expansion is part of a broader strategy by the province to tackle the housing crisis. Key complementary initiatives include:
- Removing the full eight per cent provincial portion of the HST on qualifying purpose-built rental housing.
- Providing $4 billion through the Municipal Housing Infrastructure Program.
- Allocating $1.2 billion through the Building Faster Fund to reward municipalities that accelerate housing construction.
“Homeownership is a cornerstone of Ontario’s economic success,” said Rob Flack, Minister of Municipal Affairs and Housing. “Ontario thrives only when its people thrive. That is why our government is taking this massive step forward to protect Ontario by creating conditions to get more shovels in the ground, build more homes faster and help make the dream of homeownership a reality for more people.”
The government notes that the effective date for the provincial HST rebate for first-time home buyers is also being aligned with the federal government’s proposed effective date of March 20, 2025.
More details on these measures and Ontario’s broader economic plan will be included in the 2026 Budget, scheduled for release on March 26, 2026.
Quick Facts
- Maximum Rebate: Up to $130,000 on new homes valued up to $1 million.
- Eligibility: Applies to new homes valued up to $1.5 million for the full rebate, with scaled relief up to $1.85 million.
- Timeline: Temporary measure from April 1, 2026, to March 31, 2027.
- Economic Impact: Projected to create 8,000 new housing starts and 21,000 jobs.
- Joint Relief: Federal-provincial partnership to provide $2.2 billion in tax relief.
Quotes
“Today’s announcement will provide meaningful and significant relief to the people of Ontario, helping thousands more families realize the dream of homeownership.”
— Doug Ford, Premier of Ontario
“With this enhancement and expansion of the HST rebates, we are supporting home affordability while providing relief to hardworking Ontario families on one of the biggest financial transactions of their lives.”
— Peter Bethlenfalvy, Minister of Finance
“We are taking this massive step forward to protect Ontario by creating conditions to get more shovels in the ground, build more homes faster and help make the dream of homeownership a reality for more people.”
— Rob Flack, Minister of Municipal Affairs and Housing
