The Ontario government has announced a new housing affordability measure aimed at helping first-time buyers enter the market. As part of the 2025 Fall Economic Statement, the province plans to rebate the full 8% provincial portion of the HST for first-time home buyers on newly built homes valued up to $1 million.
When combined with the federal government’s proposed removal of its 5% portion of the HST, eligible buyers could save up to $130,000 on the cost of a new home. The initiative is designed to make homeownership more attainable while stimulating new home construction across Ontario.
“Through our proposed HST rebate on new homes for qualifying first-time home buyers, we are leading by example – saving families money on one of the biggest financial transactions of their lives,” said Peter Bethlenfalvy, Ontario’s Minister of Finance.
What the Ontario HST Rebate Means for Buyers
Under the proposal, first-time home buyers purchasing a new home or substantially renovated home will be eligible for:
- Full rebate of the 8% provincial portion of HST on homes priced up to $1 million.
- Gradual phase-out for homes priced between $1 million and $1.5 million, ensuring that buyers still receive at least $24,000 in relief.
- Combined savings of up to $130,000 when paired with the federal rebate.
The program will also complement Ontario’s existing HST New Housing Rebate, which already provides up to $24,000 in relief. Together, these measures ensure that eligible first-time home buyers receive the full provincial rebate on qualifying new homes.
“Our government is working every day to bring the dream of homeownership within reach for more people,” said Rob Flack, Minister of Municipal Affairs and Housing. “This announcement is good news not only for buyers, but also for workers and tradespeople building their communities.”
Program Eligibility and Timeline
According to the province, eligibility for the new Ontario HST rebate will closely align with the federal proposal announced on May 27, 2025.
To qualify:
- The purchase agreement must be entered into between May 27, 2025, and 2031.
- Construction must begin before 2031 and be substantially completed before 2036.
- The home must be used as the buyer’s primary residence.
Implementation of Ontario’s rebate will depend on the passage of federal legislation, as the province intends to mirror the federal program’s framework.
Why It Matters
With housing affordability at crisis levels and the average Ontario home price hovering around $850,000 in 2025, this rebate could provide significant relief for young families and new buyers. It may also help boost new home construction, which has lagged in recent years.
The province is pairing this rebate with record investments in housing infrastructure, including:
- A $4 billion increase to the Municipal Housing Infrastructure Program
- A $1.2 billion Building Faster Fund to accelerate construction timelines
These initiatives form part of the broader goal to increase housing supply and support the Protect Ontario by Building Faster and Smarter Act, 2025.
Industry and Municipal Support
Industry leaders and municipal associations have voiced strong support for the rebate:
“This is good news for the thousands of young people and families who have been struggling to realize the dream of new home ownership,” said Richard Lyall, President of the Residential Construction Council of Ontario (RESCON).
“The extension of the GST/HST exemption is a step in the right direction in addressing the worst housing downturn on record,” said Dave Wilkes, President & CEO of the Building Industry and Land Development Association (BILD).
Robin Jones, President of the Association of Municipalities of Ontario, added, “This tax relief could boost buyer demand and help increase new home construction — an important priority for municipalities and the province.”
Scott Andison, CEO of the Ontario Home Builders’ Association, noted that the move “marks an important step forward in addressing Ontario’s housing challenges,” adding that targeted tax relief will help “spur construction of new homes across Ontario.”
What’s Next
More details on the rebate and other affordability measures will be outlined in the 2025 Ontario Economic Outlook and Fiscal Review, set to be released on November 6, 2025.
As Ontario continues to partner with the federal government, this initiative could become one of the most impactful housing affordability programs in the province’s history, helping more families achieve the dream of homeownership.
📍 Source: Government of Ontario – Ministry of Finance, Ministry of Municipal Affairs and Housing
📅 Date: October 28, 2025
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