Ontario and Federal Governments Cut HST on New Homes to Boost Affordability
Event summary
- Ontario and federal governments eliminate HST on new homes under $1M and reduce it for homes between $1M and $1.85M starting April 1, 2026.
- Flat $130,000 tax reduction for homes priced between $1M and $1.5M, with declining reductions up to $1.85M.
- Policy set to expire on March 31, 2027, aiming to stimulate housing market and construction jobs.
- BILD and OHBA highlight the move as critical amid economic uncertainty and slowing housing industry.
The big picture
The HST reduction is a strategic response to rising construction costs, regulatory pressures, and government-imposed taxes that have made new homes unaffordable for many in Ontario. This move aims to restore balance in the housing market and support the industry’s ability to meet the needs of the province’s growing population. The policy is part of a broader effort to address economic uncertainty and slow sales in the housing sector.
What we're watching
- Market Stimulus
- Whether the HST reduction will successfully restore momentum in Ontario’s housing market and increase housing starts.
- Economic Impact
- How the policy change will affect construction jobs and broader economic activity in Ontario.
- Policy Sustainability
- The likelihood of extending the time-bound measure beyond March 31, 2027, given its potential impact on housing affordability.
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