Prospective buyers across Ontario are poised to receive a significant tax break on newly built homes, but only for a limited time, Global News has learned, as Ford’s 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 waived for anyone buying a newly built 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 home buyers in Ontario a new home tax break.
Ontario’s promise to waive its share of the HST came shortly after a similar announcement by the federal government — allowing first-time buyers to save up to $130,000 on a new home under $1 million and lower rebates on homes costing up to $1.5 million.
But the offer failed to ignite the market, forcing the government to take a second nod at the policy and offer the discount to a wider section of buyers.
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Sources told Global News that there has been an internal struggle over the details of the revised policy. While the prime minister wanted the rebate to last for a three-year period, the government had concerns that buyers could wait on the sidelines, effectively reducing the urgency of the plan.
Instead, sources said, the government is expected to offer a full rebate on the provincial portion of the HST to all homebuyers for a one-year period, creating immediate demand in the market.
Neither the Minister of Finance, the Minister of Housing nor the Prime Minister would confirm or deny the plan – but admitted that they were looking to revive the sector.
“We’re going to give a real boost to the building and construction trade and give more opportunities for people to buy a home,” Ford said before heading into the caucus meeting on Tuesday.
His finance minister, Peter Bethlenfalvy, would not be drawn on details, but stressed the need to boost housing.
“I think affordability is an important issue for a lot of people in Ontario who dream of owning a home,” he said Tuesday.
“It is also important for the construction industry – when nothing is being built, especially after three or four years – that there is an incentive in the market to support our construction workers and the industry.”
Asked about the plan’s one-year cap, Housing Minister Rob Flack said Global News knows “more about it than I do, apparently.”
Ford said people should wait to “see how our announcement goes.”
Ontario’s efforts to build 1.5 million homes by 2031 have fallen short — 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 that the government had told them that scrapping the tax on all new homes could cost the exchequer $2 billion, significantly more than the $470 million for its cap on first-time buyers.
The extra cost would come at a time when the finance minister’s budget has grown to a record $236 billion, with a deficit of $13.4 billion and a provincial debt that will pass the half-trillion-dollar mark in 2027.
The Minister of Finance will present the budget on March 26.
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