Ontario’s finance minister is shutting down any talk of extending the province’s $1.4 billion home buyers tax credit, dashing the hopes of the housing development industry, which wants the discount offered “in perpetuity.”
The marquee feature of the 2026 Ontario budget, tabled at Queen’s Park on Thursday, was a publicly-funded tax break for any homebuyer looking to purchase a newly-built house or pre-construction condo.
Along with the federal government, Ontario will waive the full HST for homes under $1 million, giving buyers access to a $130,000 tax break for the next year. The government said the $130,000 discount would also be applied to homes up to $1.5 million.
The government expects the measure will create at least 8,000 homes, breathing new life into a sector struggling with a slump in sales.
During an interview on Focus Ontario, Minister Peter Bethlenfalvy was asked whether the measure would be extended if the program proves to be successful.
“That is not our intention,” Bethlenfalvy said flatly. “This is a one-year sale to help people with affordability.”
Get breaking National news
Even getting to this point has been a challenge.
The original version of the plan, introduced during the fall economic statement, allocated $470 million over three years to give only first-time Ontario homebuyers access to the credit.
Months later, Premier Doug Ford complained the tax break failed to move the needle and began publicly pressuring his finance minister and the federal government to expand the credit to all homebuyers.
Sources told Global News, however, that while the premier wanted the discount to run for a three-year period, the government had concerns that buyers would potentially wait on the sidelines, effectively watering down the policy.
The federal government appeared to be unconvinced as well.
The premier’s office spent weeks negotiating with the federal government and only managed to get Ottawa’s buy-in on Tuesday, roughly 12 hours before Ford announced the expanded tax break.
The 2026 budget, which would have been printed weeks earlier, indicated the province was still working with the federal government “to partner and match Ontario’s action.”
“We would have probably gone alone, sure, but I’m glad they’re there,” Housing Minister Rob Flack said of the federal government’s contribution.
Still, with the discount coming into effect on April 1, the development industry is already eyeing an extension.
“We have a year to be able to prove that this is going to achieve what we said it will,” said Scott Andison with the Ontario Home Builders Association.
“Hearing the premier talk about that he will never raise a tax, I’m encouraged by the fact that this is a removal that’s going to stay in perpetuity.”
That notion was bluntly rejected by the finance minister.
“They’re absolutely wrong,” Bethlenfalvy said. “This is a one-year thing, we’re very clear about that.”
He added, “This is what the industry has been asking for, this is what we’ve committed to do.”
Peter Bethlenfalvy’s full interview will air on Focus Ontario on Saturday at 5:30 on Global.
Those who booked pre-con before April 1st have to sell their existing homes to close. The new rebate has made it harder to sell resale properties because now pre- con is cheaper or at the same price as resale homes. This has unintentionally put these buyers at a disadvantage. Therefore the rebate should be based on closing date. What’s the point if some have to lose their deposit for others to take advantage of the rebate!
If this was to relieve Ontarians, why isn’t this retroactive to those who signed in 2026? It’s a 2026 budget! People who purchased in 2026 should get the same HST rebate! Buying a home is not an easy decision and a relief that we missed by days and weeks is unfair! Please reconsider the effective date!
The Ontario provincial fall economic statement indicated they would mirror the federal plan starting March 20, 2025 to Jan 31, 2031 for first time home buyers and now they are only doing this for one year starting a year later. When the provincial government makes announcements like this people make decisions and now are missing the opportunity because the provincial government changed what they outlined they planned to do. While it’s great everyone can now benefit I think it would have been better that they lived up to the initial plan they said they would mirror for first time buyers starting March 20, 2025. I would recommend in future they don’t outline dates in economic statements if they are not going to adhere to it.
How can they sell this as a benefit with a straight face?? The fact that a second home purchase used for rental property qualifies under this tax break is ridiculous and not helping the average person afford to buy a home. It’s infuriating to see them pat themselves on the back for this garbage offer! Can someone ACTUALLY help?!? Not holding my breath. #helpinghishomebuilderbuddiesagain
A one year housing sales tax rebate window will not increase the number of new houses on the market because anything being sold by the deadline will have already been built or has been in the construction pipeline.
All the new “free” money will make it an inflationary sellers market with more buyers chasing the same number of houses as originally planned.
And as a bonus, the lost tax revenue will just get added to Ontario and Canada’s inflation inducing public debt black holes.
And ALL the people who live in Ontario will PAY FOR IT the next year because someone will have to make up for the loss of income that FORD will not have to spend this year.