Provincial and federal partnership aims to deliver up to $130,000 in savings for buyers
MISSISSAUGA — March 25, 2026
The Ontario government is proposing a significant expansion of its Harmonized Sales Tax (HST) rebate on new homes, a move it says could lower purchase costs by as much as $130,000 and stimulate housing construction across the province.
The measure, to be included in the province’s 2026 Budget, would eliminate the full 13 per cent HST on eligible new homes valued up to $1 million. The maximum rebate would also apply to homes priced up to $1.5 million, before gradually declining to a minimum of $24,000 for homes valued at $1.85 million and above.
The proposal builds on earlier efforts by both provincial and federal governments to improve housing affordability, particularly for first-time buyers, amid ongoing economic uncertainty and elevated housing costs.
Federal cost-sharing key to program expansion
A central component of the plan is a cost-sharing agreement with the federal government, which has committed—pending legislative approval—to cover the five per cent federal portion of the HST. Combined, the initiative is expected to deliver nearly $2.2 billion in tax relief.
Premier Doug Ford framed the announcement as part of a broader strategy to strengthen Ontario’s economy while easing financial pressure on households.
“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 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.”
Temporary rebate expansion aimed at accelerating construction
The enhanced rebate program would be in effect for one year, from April 1, 2026, to March 31, 2027. During this period, eligible buyers would benefit from a temporary removal of the full HST on qualifying new homes.
Provincial officials estimate the measure could spur up to 8,000 additional housing starts in 2026, support approximately 21,000 jobs, and contribute $2.7 billion to Ontario’s gross domestic product.
Finance Minister Peter Bethlenfalvy emphasized the affordability aspect of the policy.
“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,” he said. “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.”
Alignment with federal timeline and first-time buyer support
The province is also aligning its rebate framework with federal timelines, adjusting the effective date for first-time homebuyer rebates to March 20, 2025. This ensures that both provincial and federal incentives can be accessed for qualifying purchase agreements signed between that date and the end of 2030.
Housing Minister Rob Flack said the initiative is designed to address both affordability and supply challenges.
“Homeownership is a cornerstone of Ontario’s economic success,” Flack said. “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.”
Broader housing strategy includes rental incentives and infrastructure funding
The HST rebate expansion is part of a broader housing strategy that includes removing the eight per cent provincial portion of the HST on qualifying purpose-built rental housing. The province is also investing heavily in infrastructure to support new development, including the $4 billion Municipal Housing Infrastructure Program and the $1.2 billion Building Faster Fund.
These measures are intended to address supply constraints while encouraging municipalities to accelerate approvals and construction timelines.
Municipal leaders welcome affordability measures
Local officials in Mississauga, where the announcement was made, expressed support for the initiative, highlighting its potential to improve access to homeownership.
“Today’s announcement reflects what we can accomplish when all levels of government come together with a shared commitment to getting more homes built, faster. Mississauga is growing and projects like this show the real progress happening on the ground. Our government remains focused on making life more affordable, strengthening our economy and ensuring families can build their future in communities they love. I want to thank our partners for helping keep Ontario’s momentum moving in the right direction.”
- Nina Tangri
Associate Minister of Small Business
“As a city, we welcome this important step to make homes more affordable. The provincial government’s HST cut will help turn Mississaugans’ homeownership dreams into reality. We have been doing all we can — through reductions and elimination of development charges — to get more homes built and make them more affordable. We aim to continue setting an example across Ontario. Today’s announcement furthers the necessary, coordinated effort across Canada to address affordability.”
- Carolyn Parrish
Mayor of Mississauga
Next steps
Further details on eligibility and implementation are expected to be released alongside Ontario’s 2026 Budget on March 26. Existing eligibility criteria for the New Housing Rebate and New Residential Rental Property Rebate—including requirements that homes be used as primary residences or rental properties—will remain unchanged.
The government says the initiative is part of a longer-term plan to make Ontario a more competitive place to invest and do business, while addressing one of the province’s most pressing economic challenges: housing affordability.