Ontario just made one of its biggest housing moves in years – and it could directly impact home prices across the province.
A new $8.8 billion partnership between the federal and Ontario governments aims to cut construction costs, reduce taxes, and accelerate housing supply, announced on March 30, 2026.
What Was Announced
The agreement focuses on lowering the cost to build new homes – one of the biggest barriers in today’s market.
Key measures include:
- Up to $8.8 billion in infrastructure funding over 10 years
- Development charges reduced by up to 50% in major municipalities
- Changes expected to impact areas covering 80% of Ontario’s population
- Goal: speed up construction and increase supply
Development charges – which help fund roads, water, and infrastructure – have become one of the largest upfront costs for builders, often delaying or cancelling projects.
New Tax Breaks for Buyers
The deal also includes major tax relief for homebuyers:
- Full 13% HST removed on new homes up to $1 million
- Maximum rebate of $130,000
- Partial rebates available up to $1.85 million
- Applies to agreements between April 1, 2026 and March 31, 2027
Combined with lower development charges, the government says this could reduce the cost of a new home by up to $200,000.
What the Government Says This Will Do
Officials say the plan is designed to:
- Support 8,000 additional housing starts next year
- Create up to 21,000 jobs
- Add $2.7 billion to Ontario’s GDP
- Increase housing supply while improving affordability
The strategy focuses heavily on unlocking stalled projects and making new builds financially viable again.
The Bigger Picture
This comes at a time when Ontario’s housing market is under pressure:
- High construction costs
- Slowing demand
- Delayed or cancelled condo projects
- Growing affordability challenges
By reducing upfront costs and taxes, governments are attempting to restart housing activity and bring supply back online.
What This Signals for Buyers and Sellers
For buyers:
Lower taxes and potentially lower new-build prices could create short-term opportunities – especially if supply increases.
For sellers:
If more inventory comes online, price growth could remain limited, particularly in already soft markets.
References
Government of Canada. (2026, March 30). Prime Minister Carney secures new partnership with Ontario to cut taxes on housing and boost supply. Retrieved from https://www.pm.gc.ca
Canada Housing Market 
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