Ontario Construction News staff writer
The province is planning to temporarily remove Harmonized Sales Tax (HST) for all buyers of new homes valued up to $1.5 million.
Premier Doug Ford visited a Mississauga construction site Wednesday to announce the full 13 per cent tax will be removed for new homes valued up to $1 million from April 1, 2026 to March 31, 2027.
For homes valued up to $1.5 million the temporary measure would qualify buyers for the maximum $130,000, and it will decrease proportionally to homes valued at $1.85 million, which would qualify for a $24,000 rebate, said the release.
Richard Lyall, president of the Residential Construction Council of Ontario (RESCON), called the announcement “a bold and timely move” that will breathe new life into the struggling residential construction sector.
“It is a necessary initiative given the depth of the market downturn and grim outlook for the industry. This will help revive residential construction and save industry jobs,” he said in a statement.
The West End Home Builders’ Association (WE HBA) also welcomed the announcement, saying it will significantly reduce upfront homeownership costs, help restore momentum in Ontario’s housing market and directly support the continued construction of new homes.
“The tax cut will reduce the cost of new housing and help get shovels in the ground to protect Ontario and save jobs,” said Mike Collins-Williams, CEO of WE HBA.
The construction sector continues grappling with a perfect storm of economic pressures including rising construction costs, regulatory barriers and an exorbitant tax burden on new housing.
A report produced for RESCON by the Canadian Centre for Economic Analysis (CANCEA) showed taxes, fees and levies account for 36 per cent of the cost of a new home.
In the Greater Toronto Hamilton Area, single-family home sales have plunged, and housing starts have fallen sharply, contributing to job losses across the industry and its supply chain.
“The stakes for our industry could not be higher,” said Lyall. “Residential construction is one of the key economic engines of this province. When projects stop moving forward, it affects everyone from skilled tradespeople and apprentices to manufacturers and local businesses.”
Without government intervention, housing starts and sales were forecast to remain stagnant.
“The step taken today is exactly the kind of initiative we need right now,” said Lyall. “Builders are ready to build and continue to work with government to remove the remaining obstacles that prevent builders from delivering homes that are affordable.”
