The Ontario government says it plans to expand the Harmonized Sales Tax rebate on new homes, a move it says could save buyers up to $130,000 and help spur housing construction across the province.
The proposal, to be included in the 2026 budget, would remove the full 13 per cent HST for eligible buyers of new homes valued up to $1 million. The maximum rebate of $130,000 would also apply to homes valued up to $1.5 million, before gradually decreasing for higher-priced homes.
The province says the federal government has agreed to cost-share the initiative, subject to federal legislation, covering the five per cent federal portion of the HST. Together, the governments estimate the plan would provide nearly $2.2 billion in tax relief.
“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.”
The enhanced rebate would apply for one year, from April 1, 2026, to March 31, 2027, and build on existing provincial and federal programs aimed at improving housing affordability.
The government estimates the expanded rebate could lead to an additional 8,000 housing starts next year, supporting up to 21,000 jobs and contributing $2.7 billion to Ontario’s GDP.
“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 Finance Minister Peter Bethlenfalvy. “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.”
The province also says it is aligning the effective date of its first-time homebuyer rebate with the federal government’s proposed date of March 20, 2025, and expanding relief measures introduced last fall.
“Homeownership is a cornerstone of Ontario’s economic success,” said Municipal Affairs and Housing Minister Rob Flack. “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.”
In addition to the rebate changes, the province says it is continuing to invest in housing supply through infrastructure funding programs and measures aimed at accelerating construction, with further details expected in the 2026 budget, set to be released March 26.
