Ontario to waive HST on new homes
The Ford government is poised to remove the provincial portion of the HST on all new homes to stimulate construction and new‑build sales, a policy move intended to prop up a struggling sector reported. The change could nudge demand for newly built mortgages and shift origination mix in Ontario if implemented.
Finance Minister Peter Bethlenfalvy is slated to flesh out an expansion of the October 28, 2025 first‑time buyer rebate in the province’s spring budget, after the original measure was announced in the 2025 Fall Economic Statement. (news.ontario.ca) The initial program was funded at roughly $470 million over three years for first‑time buyers, and development‑industry sources told Global News an all‑buyer waiver the premier has pushed for would cost the treasury about $2 billion. (globalnews.ca) Ottawa’s complementary change — Bill C‑4 to remove the federal GST for qualifying first‑time new‑home buyers — was estimated by the Parliamentary Budget Officer to cost about $1.9 billion over six years. (pbo-dpb.ca) Industry groups and economic consultancies are pushing for a broader, time‑limited HST holiday; the Canadian Centre for Economic Analysis model cited by RESCON estimated a three‑year exemption up to $1.3M would preserve ~26,000 jobs and add about $3.9 billion to GDP. (ca.news.yahoo.com) Policy urgency is driven by sharply weaker new‑build activity in Ontario last year: CMHC‑sourced reporting found Ontario housing starts were down materially in 2025 (one estimate showed a 23% drop year‑over‑year), with pre‑construction sales plunging in many GTA municipalities. (globalnews.ca) Mortgage brokers and lending‑industry groups publicly welcomed the provincial rebate for first‑time buyers, noting it would directly boost demand for builder‑handled transactions that often convert into insured or uninsured purchase mortgages. (canadanewsmedia.ca) Bank of Canada officials have signalled that housing demand will be an explicit input into future policy frameworks, and Bank staff research quantifies how changes in mortgage interest rates transmit to house prices and rents — factors that will shape how the central bank assesses any demand stimulus from tax relief. (ca.finance.yahoo.com)
