Ontario Introducing Legislation to Support Implementation of HST Relief on New Homes

Proposed legislation would help deliver on Ontario’s promise to remove the HST on most new homes in partnership with the federal government

 the Ontario government introduced the HST Relief Implementation Act (Residential Property Rebates), 2026 to support the implementation of the province’s 13 per cent HST relief on eligible new homes, which is being delivered in partnership with the federal government. This initiative would provide buyers of most new homes in Ontario with up to $130,000 in relief and could stimulate an additional 8,000 housing starts in Ontario next year, support up to 21,000 jobs and boost Ontario’s GDP growth by $2.7 billion.

“We’re already seeing the positive impact of our commitment to remove the HST from most new homes, with more shovels in the ground on new homes across Ontario,” said Peter Bethlenfalvy, Minister of Finance. “Our government will continue fighting to lower costs for homebuyers, keep the dream of homeownership alive in Ontario and keep workers in our construction sector on the job.”

Buyers of eligible new homes valued at $1 million or less would receive the full 13 per cent relief on their home, to a maximum value of $130,000, while buyers of eligible homes valued at $1 million to $1.5 million would see relief of $130,000. The HST relief on eligible homes valued above $1.5 million would decline gradually to a maximum of $24,000 for homes valued at $1.85 million or more.

These legislative changes are required due to the nature of the federal government’s participation in this relief initiative, which requires the province to amend the Retail Sales Tax Act to enable a provincial top-up program of up to $50,000, equivalent to the five per cent federal portion of HST on a new home valued at $1 million. The federal government is compensating the province for this top-up program through a transfer of $875 million. This top-up builds on the up to $80,000 that would be available to eligible buyers under the enhanced New Housing Rebate and New Residential Rental Property Rebate for the eight per cent provincial portion of HST. Together this would provide up to $130,000 in HST relief for eligible buyers.

While applications for HST relief are not open at this time, those who meet the relevant eligibility criteria can apply for the relief once applications open. For example, purchasers of an eligible home acquired on or after April 1, 2026, and on or before March 31, 2027, would be able to apply at a later date to receive the HST relief, even though the application process has not yet opened.

The proposed legislation also includes provisions that would enable buyers to assign this top-up to builders so that sellers can take the full HST relief amount off the price of a new home up front. The government continues to work with the federal government to implement the HST relief through necessary federal regulatory changes and has asked the federal government to administer the full HST relief program through the Canada Revenue Agency. Further details on how home buyers will be eligible for the relief will be made available at the earliest possible opportunity.

These measures build on existing provincial housing tax supports to help increase the supply of affordable homes, support housing development and foster a robust housing industry across Ontario. This includes removing the full eight per cent provincial portion of the HST on qualifying purpose-built rental housing. The province is also providing historic housing-enabling infrastructure funding through the $4 billion Municipal Housing Infrastructure Program and the $1.2 billion Building Faster Fund, which rewards eligible municipalities that make real progress in getting shovels in the ground to build new homes.

Quick Facts

• Implementation of the enhancements to the rebates on the eight per cent provincial portion of the HST requires federal regulatory amendments.
• The HST Relief Implementation Act (Residential Property Rebates), 2026 would create regulation-making authority and audit authority regarding the five per cent top-up program. Regulations outlining additional details would follow once federal regulations for the rebate on the eight per cent provincial portion of the HST are in place.
• Technical information related to additional program and administration details is available online, and will be updated as needed.