Ontario's latest provincial budget has delivered significant relief for prospective homeowners, eliminating the provincial portion of HST on new homes valued up to $1 million, with graduated savings extending to properties worth $1.85 million.
The Residential Construction Council of Ontario (RESCON) praised the move, which removes the eight per cent provincial HST component on qualifying new home purchases. When combined with the federal government's promised five per cent tax reduction, buyers will see total savings of 13 per cent on their new home purchases.
"Premier Doug Ford and his team, and Prime Minister Mark Carney are to be commended for taking this vital step forward as it will spur construction of new homes and boost the building industry," said RESCON president Richard Lyall in a statement released from Vaughan, Ontario.
The tax relief structure provides full HST elimination on homes up to $1 million, with graduating amounts for properties valued between $1 million and $1.5 million, and reduced savings on homes worth up to $1.85 million. For a $1-million home, buyers will receive a rebate of $130,000.
Industry Impact Expected to Be Substantial
According to provincial budget details, the rebate program will run for one year, from April 1, 2026, to March 31, 2027. Government projections suggest the initiative will stimulate an additional 8,000 housing starts in Ontario next year alone.
The economic ripple effects are expected to be significant, with officials estimating the program will support up to 21,000 jobs and boost Ontario's GDP growth by $2.7 billion.
"For consumers, the tax relief helps address affordability concerns as it will result in a rebate of $130,000 on a $1-million home," Lyall noted.
The timing of this tax relief comes as Canada's housing market faces ongoing affordability challenges, particularly in major centres like Toronto and surrounding regions. The construction industry has been calling for such measures to help stimulate new home building and make homeownership more accessible to Canadian families.
While Alberta homebuyers won't directly benefit from Ontario's provincial HST changes, the federal component of the tax relief will apply across Canada, potentially providing savings for Calgary and Edmonton area new home purchasers as well.
This story is based on reporting by David Chen of the Financial Post. Original article available at Financial Post.
