Ford government planning to waive HST on new homes for 1 year

Potential buyers across Ontario are poised to receive a significant tax discount on newly-built homes, but only for a limited time, Global News has learned, as the Ford government looks to boost a sector struggling with a slump in sales.

As part of his spring budget, Finance Minister Peter Bethlenfalvy is expected to announce that the provincial portion of the harmonized sales tax will be removed for anyone buying a newly-constructed home, rewriting a policy the government introduced just months ago.

The original version of the plan, introduced during the fall economic statement, allocated $470 million over three years to give first-time Ontario homebuyers a tax break on new homes.

Ontario’s pledge to waive its portion of the HST came shortly after a similar announcement by the federal government — allowing first-time homebuyers to save up to $130,000 on a new home under $1 million, and lower rebates for homes costing up to $1.5 million.

But the offer failed to ignite the market, forcing the government to take a second pass at the policy, and offer the discount to a wider swath of purchasers.

Sources told Global News there has been an internal struggle over the details of the revised policy. While the premier wanted the discount to run for a three-year period, the government had concerns that buyers could wait on the sidelines, effectively watering down the urgency of the plan.

Instead, sources said, the government is expected to offer a full discount on the provincial portion of the HST for all homebuyers for a one-year period, creating instant demand in the market.

Neither the Finance Minister, Housing Minister or Premier would confirm or deny the plan — but acknowledged they were looking to invigorate the sector.

“We’re going to give a real boost to the building and construction trade and put in more opportunity for people to buy a home,” Ford indicated before heading into caucus meeting Tuesday.

His finance minister, Peter Bethlenfalvy, would not be drawn on the details but emphasized the need to boost housing.

“I think affordability is an important issue for many people in Ontario who dream  of owning a home,” he said on Tuesday.

“It’s also important for the construction industry — when nothing’s getting built, particularly three or four years from now — that there’s some stimulus to the market to support our construction workers and the industry.”

Asked about the one-year limit on the plan, Housing Minister Rob Flack said Global News knows “more about it than me, it appears.”

Ford said people should wait to “see how our announcement goes.”

Ontario’s efforts to build 1.5 million homes by 2031 have fallen flat — there were just 62,561 housing starts in 2025 — leading to calls for additional government intervention to stimulate the market.

Development industry sources told Global News the government had indicated to them that waiving tax for all new homes could cost the treasury $2 billion, substantially more than the $470 million for limiting it to first-time homebuyers.

The additional cost would come at a time when the finance minister’s budget has ballooned to a record $236 billion, with a $13.4-billion deficit and a provincial debt that’s set to cross the half-a-trillion-dollar threshold in 2027.

The finance minister will table the budget on March 26.

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