Ontario is proposing to rebate the full 8 per cent provincial portion of the HST for first-time home buyers who are purchasing new homes valued up to $1 million.

The provincial initiative, to be included in the 2025 Fall Economic Statement, will save first-time homebuyers $130,000 on a $1-million home, when combined with the federal measure to eliminate the GST on new homes at or under $1 million as well as reducing it on new homes between $1 and $1.5 million.

“In the face of tariffs and global economic uncertainty, it’s never been more important to make life more affordable for the hardworking people of Ontario,” said Minister of Finance Peter Bethlenfalvy. “Ontario families deserve more money back in their pockets and we are continuing to build on our track record of doing just that.”

The new rebate would work alongside the existing Ontario HST New Housing Rebate, which offers up to $24,000 in relief. Together, the rebates would cover the full 8 per cent provincial HST for homes up to $1 million.

For homes between $1 million and $1.5 million, the new rebate would gradually decrease. This ensures that the combined amount of relief available under both Ontario rebates never falls below the amount that is currently provided through the existing rebate.

The Residential Construction Council of Ontario (RESCON) has praised the move, having long viewed the heavy tax burden as a major obstacle to home construction.

“Lowering the excessive tax burden on the purchase of a new home for first-time buyers, in line with what the feds have done, will help those who have been priced out of the market,” said RESCON president Richard Lyall. “First-time buyers account for roughly 35 per cent of new home purchases but they have been particularly hard hit, given the housing-cost-to-income-ratio which, in recent years, has moved beyond historic averages. This initiative will help to prevent younger talent and families from leaving the Greater Toronto Area and the province.

“The timing of this action is critical as the outlook for the residential construction industry is grim just now. In Toronto, for example, housing starts are near a 30-year low, and sales have ground to a halt. Forecasts indicate this weakness is expected to continue.”