Ontario to Suspend HST on New-Home Purchases for One Year

Houses under construction in Toronto in a file photo. Graeme Roy/The Canadian Press

The Ontario government is removing the Harmonized Sales Tax (HST) on new homes for one year in an effort to stimulate a sector struggling with dwindling sales, Premier Doug Ford said.

Ford announced the plan at a March 25 press conference in Mississauga, saying the full 13 percent tax will be eliminated for new homes worth up to $1 million from April 1, 2026, through March 31, 2027.

Homes valued between $1 million and $1.5 million will be eligible for the maximum rebate of $130,000, according to a government press release. The rebate will decrease proportionally up to homes valued at $1.85 million, which qualify for a $24,000 rebate.

The temporary measure will be included in the provincial budget to be unveiled on March 26 at Queen’s Park, the premier told reporters.

“For too many families, the dream of home ownership is being pulled out of reach by high costs and economic uncertainty,” said Ford.

The premier said he hopes the move will stimulate the province’s sluggish housing sector and encourage homebuilding. He described the announcement as akin to a retailer advertising a 13 percent off sale.

“Please get everything together, you have one year... talk to your bankers and start buying the homes,” he said, adding that “people are hungry” to enter the market.

He said he hopes the rebate expansion will spur 8,000 more housing starts in the province by 2027, and generate more than 20,000 construction jobs while bolstering Ontario’s GDP by $2.7 billion.

The new policy updates the government’s 2025 housing affordability plan, which provided an 8 percent provincial rebate for first-time buyers.

The policy now covers all homebuyers, not just first-time buyers, and a partnership with the federal government means the full tax is waived instead of just the province’s portion of the HST.

The province said Ottawa will cost-share the rebate with Ontario, “subject to passage of federal legislation.”

Ford called on municipal governments to help lower costs further for homebuyers.

“One of the biggest factors in the increased cost of housing is government taxes, fees and development charges that add hundreds of thousands of dollars to the cost of a new home,” he said. “We need you to step up to… cut these costly fees that add hundreds of thousands of dollars to the cost of new homes, so we can get building and help more families find a home that meets their needs and their budgets.”

Eligibility Criteria

To be eligible for the rebate, a new home must serve as a primary residence or a rental property for residential purposes, and purchasers must execute the purchase agreement between April 1, 2026, and March 31, 2027.

Construction of properties acquired as a primary residence must start by the end of 2028, and be finished by the end of 2031, according to the press release. Construction on properties purchased as rental units must be finished by the end of 2029.

Additional eligibility requirements are to be available on the province’s website by the end of the month.