TORONTO – While the real estate market in Toronto and the GTA remains stalled, with unsold and vacant homes partly due to recent drastic cuts to immigration, the provincial government led by Doug Ford is preparing to offer a tax break to all buyers of new homes. According to Global News (here), as part of the spring budget, Ontario Finance Minister Peter Bethlenfalvy is expected to announce that the provincial portion of the Harmonized Sales Tax (HST) will be eliminated for anyone purchasing a newly built home, revising a policy that the government introduced just a few months ago.
The original version of the plan, presented during the fall economic statement, allocated $470 million over three years to give first-time homebuyers in Ontario a tax break on new homes. However, just a few months after the plan’s introduction, the premier himself stated that the measure had not generated the pre-construction sales the province had expected.
“I have always been an advocate of getting rid of the HST for everyone,” Ford said in January. And then: “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.”
Sources from the construction industry told Global News that the government indicated eliminating the tax for all new homes could cost the treasury around $2 billion, far more than the $470 million allocated when it was limited to first-time buyers. This additional cost comes at a time when the finance minister’s budget has reached a record $236 billion, with a $13.4 billion deficit and a provincial debt expected to surpass $500 billion by 2027.
In a recent pre-budget speech at the Empire Club, Bethlenfalvy warned that Ontario’s outlook is “uncertain” due to global instability and suggested that the provincial government needs to restrain spending. “From a fiscal perspective, stability matters,” said Bethlenfalvy who will table the budget on March 26.
Meanwhile, the government’s efforts to build 1.5 million homes by 2031 have also fallen short, producing only 62,561 new housing starts in 2025, leading to calls for further government intervention to stimulate the market.
After all, if they can’t even sell the homes that already exist, what’s the point of building new ones? And above all: that much-touted “housing shortage”—where is it?
Photo by Danist Soh from Unsplash
