Ford government poised to waive HST on all new homes as sector struggles

The Ford government is poised to offer all home buyers a significant tax discount on newly built homes, Global News has learned, in a major expansion of a government program designed to breathe life into Ontario’s sluggish housing sector.

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 removed for anyone buying a newly constructed 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 Ontario homebuyers a tax break on new homes.

Ontario’s pledge to waive its portion of the HST came shortly after a similar announcement by the federal government — allowing first-time homebuyers to save up to $130,000 on a new home under $1 million, and lower rebates for homes costing up to $1.5 million.

Only a few months after introducing the policy, however, the premier said it had failed to produce the pre-construction sales the province had hoped for —something Ford said he had warned would happen.

“I have always been an advocate of getting rid of the HST for everyone,” Ford said in January.

“We did it for first-time homebuyers, but obviously that didn’t move the needle, which I predicted it wouldn’t move the needle. Let’s open it up to anyone who wants to buy a new home.”

But Bethlenfalvy, Ford said, has always been cautious of the costs.

“Thank you for being tight as skin on a grape when it comes to spending taxpayers’ money,” Ford recently said of his finance minister.

Development industry sources told Global News the government had indicated to them that waiving tax for all new homes could cost the treasury $2 billion, substantially more than the $470 million for limiting it to first-time homebuyers.

The additional cost would come at a time when the finance minister’s budget has ballooned to a record $236 billion, with a $13.4-billion deficit and a provincial debt that’s set to cross the half-a-trillion-dollar threshold in 2027.

At a recent pre-budget speech at the Empire Club, Bethlenfalvy warned that Ontario’s outlook is “uncertain” amid global instability and suggested the government needs to restrain spending.

“From a fiscal perspective, stability matters,” Bethlenfalvy said.

Still, the government’s efforts to build 1.5 million homes by 2031 have fallen flat — there were just 62,561 housing starts in 2025 — leading to calls for additional government intervention to stimulate the market.

The Ontario Home Builders Association argued that limiting the HST rebate to first-time homebuyers would impact only five per cent of the market and called for an “Ontario-led approach” to remove the sales tax off all new home purchases.

While the Ford government has been appealing to the federal government to broaden their HST exemption, the province is willing to go it alone.

“A functioning housing market is a competitiveness strategy that helps attract and keep construction jobs while boosting affordability and growing our economy,” Bethlenfalvy told the Empire Club.

The finance minister will table the budget on March 26.

Source: Global News