Ontario Construction Report staff writer
The Ontario government has introduced new legislation aimed at delivering a major tax break for new homebuyers, with officials projecting the measure could mean thousands of construction jobs and stimulate billions in economic growth.
Although applications are not yet open, the province said buyers of eligible homes acquired between April 1, 2026, and March 31, 2027, would be able to apply once the program launches. The legislation also includes provisions allowing buyers to assign the rebate to builders, enabling developers to reduce purchase prices upfront.
The proposed HST Relief Implementation Act (Residential Property Rebates), 2026 would support the rollout of a 13 per cent HST relief program on eligible new homes, in partnership with the federal government.
Expected to provide up to $130,000 in relief for qualifying buyers, the legislation could help spur an estimated 8,000 additional housing starts next year, support up to 21,000 jobs, and add $2.7 billion to Ontario’s GDP, according to provincial officials.
“We’re already seeing the positive impact of our commitment to remove the HST from most new homes, with more shovels in the ground on new homes across Ontario,” said Finance Minister Peter Bethlenfalvy. “Our government will continue fighting to lower costs for homebuyers, keep the dream of homeownership alive in Ontario and keep workers in our construction sector on the job.”
Under the proposed framework, buyers of eligible new homes valued at $1 million or less would receive the full 13 per cent HST relief, up to $130,000. For homes priced between $1 million and $1.5 million, buyers would also receive up to the maximum $130,000 benefit. The relief would then phase down for homes valued above $1.5 million, to a minimum of $24,000 for homes priced at $1.85 million or higher.
Legislative changes are needed to implement a federal-provincial cost-sharing structure. Ontario would amend the Retail Sales Tax Act to enable a provincial top-up program of up to $50,000—equivalent to the federal portion of the HST on a $1 million home. The federal government is expected to transfer $875 million to Ontario to support the measure.
This top-up would build be added to an existing provincial rebate of up to $80,000 tied to the provincial portion of the HST, bringing total potential relief to $130,000 for eligible purchasers.
The province is also working with Ottawa on federal regulatory changes and has proposed that the Canada Revenue Agency administer the full rebate program.
Technical details and program guidelines are expected to be released as federal and provincial regulatory work progresses.