TORONTO, Ont. — The Ontario government is moving to make homeownership more affordable for first-time buyers by proposing a rebate of the full 8 per cent provincial portion of the Harmonized Sales Tax (HST) on most new homes valued up to $1 million. The initiative, announced Tuesday, will be included in the province’s 2025 Fall Economic Statement and is designed to help ease financial pressures while boosting home construction across Ontario.
If implemented, the rebate would save qualifying first-time home buyers up to $80,000 on the purchase of a new home. When combined with the federal government’s proposed removal of its 5 per cent share of the HST—worth an additional $50,000 in savings—the total cost reduction could reach $130,000.
Major Step Toward Affordability
Finance Minister Peter Bethlenfalvy said the rebate is part of the government’s broader effort to “protect Ontario” by lowering costs and improving affordability.
“In the face of tariffs and global economic uncertainty, it’s never been more important to make life more affordable for the hardworking people of Ontario,” said Bethlenfalvy. “Through our proposed HST rebate on new homes for qualifying first-time home buyers, we are leading by example – saving families money on one of the biggest financial transactions of their lives. Ontario families deserve more money back in their pockets and we are continuing to build on our track record of doing just that.”
The rebate proposal mirrors the federal government’s First-Time Home Buyers’ GST/HST Rebate, announced earlier this year. It will apply to qualifying newly built or substantially renovated homes purchased between May 27, 2025, and 2031, with construction required to begin before 2031 and completion before 2036.
Encouraging New Home Construction
The province hopes the policy will not only lower costs for first-time buyers but also stimulate Ontario’s housing sector by driving demand and supporting builders and tradespeople.
“Our government is working every day to bring the dream of homeownership within reach for more people,” said Rob Flack, Minister of Municipal Affairs and Housing. “Today’s announcement is good news not only for first-time homebuyers, but for workers and tradespeople who can keep doing what they love – building their communities. The actions we’re taking today complement our legislation and is just one more way we are protecting Ontario by creating the conditions to build.”
The new rebate will build upon Ontario’s existing HST New Housing Rebate, which provides relief of up to $24,000 to eligible purchasers. Together, the two programs would eliminate the full 8 per cent provincial portion of the HST on qualifying new homes up to $1 million. For homes priced between $1 million and $1.5 million, the rebate will gradually phase out, ensuring that total relief is not less than the existing provincial rebate amount.
Industry Welcomes Move
Leaders from Ontario’s housing and municipal sectors welcomed the announcement, calling it a critical step in addressing housing affordability and revitalizing new home construction.
“RESCON has been advocating for an aligned GST/HST rebate for first-time homebuyers,” said Richard Lyall, President of the Residential Construction Council of Ontario. “We are grateful to the provincial government for their announcement today which implements this full GST/HST rebate of 13 per cent for first-time homebuyers in Ontario. This is good news for the thousands of young people and families who have been struggling to realize the dream of new home ownership. Premier Ford, Minister Bethlenfalvy and Minister Flack are demonstrating decisive leadership as we work collaboratively to address the housing challenges facing our province.”
Dave Wilkes, President and CEO of the Building Industry and Land Development Association (BILD), said the rebate comes at a pivotal time. “The Ontario government’s extension of the GST/HST exemption to the first $1 million on the purchase of a new home, or substantially renovated home, for first time home buyers is a step in the right direction in addressing the worst housing downturn on record,” Wilkes said. “With GTA new housing prices down 20 per cent from the peak and these new measures, now is a great time for first buyers to step off the sidelines and get into the market.”
Municipal leaders also praised the policy’s potential to stimulate home construction. “AMO commends the province on taking steps to reduce the cost of new homes for first-time home buyers,” said Robin Jones, President of the Association of Municipalities of Ontario (AMO) and Mayor of Westport. “This tax relief could boost buyer demand and help increase new home construction — an important priority for municipalities and the province.”
Scott Andison, CEO of the Ontario Home Builders’ Association, said the announcement marks progress in tackling one of the province’s most pressing challenges. “The recognition by all levels of government that taxation is a barrier to homeownership and substantial home renovation marks an important step forward in addressing Ontario’s housing challenges,” Andison said. “As pressures on the home building industry persist, we remain committed to working with government to support policies that will help get more homes built across Ontario.”
Looking Ahead
The rebate proposal forms part of the province’s broader economic plan, which includes record investments in housing and infrastructure. These include a $4-billion increase to the Municipal Housing Infrastructure Program and a $1.2-billion Building Faster Fund, both aimed at supporting municipalities and accelerating home construction.
More details on the government’s fiscal and housing strategy are expected in the 2025 Ontario Economic Outlook and Fiscal Review, set for release on November 6, 2025.
