Ontario to eliminate HST on new homes under $1M in bid to boost affordability

(Horizon Weekly / TORONTO) – The government of Ontario has announced plans to eliminate the full 13 per cent Harmonized Sales Tax (HST) on new homes valued up to $1 million, in a move aimed at improving housing affordability and stimulating construction.

The proposal, unveiled by Premier Doug Ford, is part of the province’s upcoming 2026 budget and would provide eligible homebuyers with tax relief of up to $130,000. The maximum rebate would also apply to homes valued up to $1.5 million, with the rebate decreasing gradually for higher-priced properties.

The initiative is being developed in partnership with the federal government, which has agreed in principle to cover its 5% share of the HST, pending legislative approval. Together, the two levels of government are expected to deliver approximately $2.2 billion in tax relief.

According to the provincial government, the measure is intended to ease financial pressure on families while encouraging new housing development. Officials estimate the plan could lead to the construction of an additional 8,000 homes and support up to 21,000 jobs, while contributing roughly $2.7 billion to Ontario’s economic growth.

The expanded rebate would be in effect for one year, from April 1, 2026, to March 31, 2027, and would apply to buyers purchasing homes as primary residences or rental properties.

Finance Minister Peter Bethlenfalvy said the measure comes amid ongoing economic uncertainty and rising costs, emphasizing the need to make homeownership more attainable. Housing Minister Rob Flack added that the policy is part of a broader strategy to accelerate home construction and address supply shortages.

The announcement builds on earlier measures targeting first-time homebuyers and includes additional incentives for purpose-built rental housing, as the province continues efforts to tackle its housing affordability crisis.