OHBA and BILD applaud the game-changing reduction and elimination of the harmonized sales tax (HST) on new homes in Ontario

Greater Toronto Area, March 25, 2026 – The Building Industry and Land Development Association (BILD) and the Ontario Home Builders’ Association (OHBA) welcome today’s decision by the provincial and federal governments to remove the harmonized sales tax (HST) on new homes under $1 million and to reduce the sales tax on new homes between $1 million and $1.85 million for the next year. This measure will significantly reduce upfront homeownership costs, help restore momentum in Ontario’s housing market, and directly support the continued construction of new homes to meet the needs of Ontario’s growing population.

The leadership shown by the Ontario and federal governments will stimulate economic activity and support jobs at a critical period for the region, province and the nation. OHBA and BILD acknowledge the collaboration between the provincial and federal governments in advancing these measures and welcome this action to address housing affordability.

“At a time where we are facing huge economic uncertainty and a slowing housing industry, this is a major step toward unlocking affordability in Ontario’s housing market and supporting the broader economy. This is great news for both new home purchasers and the 100,000s of workers in our industry,” said Dave Wilkes, President and CEO of BILD.

This policy change will eliminate the full 13 per cent HST on a new home’s purchasing price under $1 million, it will provide a flat $130,000 sales tax reduction for homes priced between $1 million and $1.5 million, and for amounts between $1.5 million and $1.85 million, there will be a declining tax reduction from $130,000 to the existing $24,000 provincial rebate amount. New homes in excess of $1.85 million will continue to receive the $24,000 provincial rebate. This includes homes created through substantial renovations which are treated as new housing for tax purposes.

This new measure will reduce upfront costs for homebuyers, strengthening their purchasing power and improving mortgage qualification outcomes. It will also encourage new home purchases, ultimately leading to increased housing starts, construction jobs and future supply.

This time-bound measure will take effect on April 1, 2026, and expire on March 31, 2027.

“With affordability challenges sidelining many potential buyers and new home sales slowing across the province, today’s announcement provides meaningful relief for homebuyers and much-needed support for Ontario’s residential construction sector, professional renovation industry, and their workers to restore the pipeline of much needed new homes across the province,” said Scott Andison, Chief Executive Officer of OHBA.

The industry has been facing increasing pressures in recent years as housing affordability has been affected by rising construction costs, regulatory requirements and government-imposed taxes and fees. In many communities, especially across the Greater Toronto Area (GTA), government charges on a new home now account for at least 25 to 30 per cent of the final purchase price. This has created a situation where the cost to build a new home has been outstripping the market’s ability to absorb, leading to a prolonged period of slow sales and lower starts, eroding future supply.

Reducing the tax burden on new homes is an important step toward restoring balance in the housing market while helping ensure that the industry can continue to deliver the homes and jobs needed to support Ontario’s growing population.