Recent government announcements regarding the HST on new homes and the lowering of development charges in Ontario were welcome news to developers and buyers alike. Homeownership has long been the Canadian dream, and now the HST reductions feed into the concept of a dream home for second-time and subsequent buyers, as well as first-time purchasers. In addition, the Canada-Ontario Partnership to Build makes it possible for municipal development charges to be reduced by up to 50 per cent for three years. Both governments will cost-match a total of $8.8 billion over 10 years, with the majority of funds supporting the reduction of municipal development charges. Currently, these fees add up to hundreds of thousands of dollars to the cost of new homes in Ontario. Combined with the full HST relief, this will have a huge impact on affordability for all Ontarians looking to purchase new homes. Consumer confidence is on the rise.

Critical driver

And consumer spending is a critical driver in our economy, combined with lower interest rates and inflation settling near the two per cent target. A boost in new home sales will be an important factor. The Ontario HST Rebate 2026 is a temporary program that could save all buyers of new homes up to $130,000. The rebate applies to all buyers of new homes in Ontario with purchase agreements signed between April 1 of this year and March 31, 2027. The eligible homes must be used as primary residences or residential rental properties.

The initiative translates to a maximum possible rebate of $130,000 for homes valued at up to $1.5 million. In total, the federal-provincial partnership will provide about $2.2 billion in joint tax relief for new housing in Ontario. Premier Doug Ford has said it will boost Ontario’s economy by $2.7 billion and could be the catalyst for an additional 8,000 housing starts in Ontario during the next year. Good news, indeed.

This major step is a massive incentive that we know will motivate buyers to act and help the entire new construction industry to rally. First-time buyers enjoy getting into the new home market so they can someday right-size to succeeding houses and condominiums as their lives change. For months, industry professionals have been asking for government action that would expand the program announced in the fall to all new-home buyers (some restrictions apply). At last, it has happened.

In addition, the Ontario government’s $4-billion Municipal Housing Infrastructure Program and $1.2-billion Building Faster Fund are enabling eligible municipalities to create infrastructure that will help get shovels in the ground to build new homes. In 2022, our provincial government announced the goal of building 1.5 million homes by 2031, which of course is unreasonable given current circumstances. The recent HST rebate initiative will help a lot, but we need more innovative ideas such as this to kick-start new home sales again – and we need it on a variety of levels. For example, we need to encourage young workers to become part of the trades, as well as welcoming immigrants into the new home construction industry. Progress is being made on constructing modular structures around the world, including Canada, which holds a lot of promise for affordability for a variety of housing types, including highrise residences.

Rising consumer confidence

The Bank of Canada has held the key interest rate at 2.25 per cent, and we are seeing developers focusing more on sustainability, energy efficiency and midrise residences to satisfy the “missing middle.” We are also looking at economic improvements including Canada’s Consumer Price Index being close to the Bank of Canada’s two-per-cent target. This keeps inflation above zero and supports sustainable economic growth. In addition, on a per-person basis, our GDP rose in 2025 for the first time in three years, growing by about 1.1 per cent.

Plus, for the first time in six months, home sales in the GTA rose year-over-year in March. It is refreshing to see consumer confidence in Canada, and especially Ontario, coming back. Savvy would-be purchasers will buy now, while it is still a buyers’ market. Kudos to our governments for working together to take these important steps in helping to restore consumer confidence and boost our province’s economy.