Ontario moves to ease homeownership costs for first-time buyers

 Ontario’s government unveiled a plan to remove the full 8% provincial portion of the harmonized sales tax (HST) for first-time buyers of newly built homes valued up to $1 million—a move the Ontario Real Estate Association (OREA) called “much-needed relief” for those entering the market.

“Keeping the dream of homeownership alive is a key goal that the Ontario Real Estate Association (OREA) and REALTORS across the province have long been fighting for,” Cathy Polan, OREA president, said.

“For years, we have called on the Government of Ontario to work on lowering housing costs by providing incentives and new, innovative pathways to homeownership for first-time home buyers—and today’s announcement did just that.”

New tax relief could put thousands back in buyers’ pockets

The province estimated that the HST cut could mean up to $80,000 back for first-time buyers, a figure OREA described as “a welcome and much-needed relief for those who are making one of the biggest financial transactions of their lives.”

The new rebate would also align with the federal government’s proposed phased reduction for homes valued between $1 million and $1.5 million, potentially providing up to an additional $24,000 in rebates for buyers in that range.

While these numbers have been widely cited by industry groups, the actual savings will depend on the final details of the legislation and how many buyers qualify.

Industry welcomes move, but affordability challenges remain

OREA commended the Ford government for “continuing to protect Ontario and keep costs down,” with Polan adding, “This type of bold action, combined with the tax relief proposed by the federal government, is exactly what we need to help young Ontarians and their families get a foot on the homeownership ladder.”

The announcement builds on the recently introduced Bill 60, the Fighting Delays, Building Faster Act, 2025, which aimed to accelerate housing construction and reduce red tape for developers. However, some housing economists have cautioned that tax relief alone may not be enough to address Ontario’s chronic supply shortages and rising prices, which have pushed homeownership further out of reach for many.

Polan thanked Premier Doug Ford and key ministers for “working to ensure that the next generation of Ontarians can find a great place to call home.” Still, affordability remains a complex challenge, with factors like interest rates, supply constraints, and wage growth all playing a role.

Canadian home prices have skyrocketed over the past 30 years, especially in big cities, according to a new REMAX Canada report. Population growth and policy changes have fueled these sharp increases.

Home prices have climbed much faster than wages, making it tougher for first-time buyers to get into the market. In the Greater Toronto Area, for example, average family income grew by just 34.6% from 1994 to 2023, while home prices more than quadrupled.

“Affordability, population growth and supply shortages are the recurring themes shaping residential housing in Canada,” Kottick said.

“While each market exhibits local nuances—Vancouver’s looming condo shortage, Edmonton’s affordability and Halifax’s steep climb in values—the shared pressures unite all major regions.”

CMP

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