The Ford government is expecting to spend $470 million to give first-time Ontario homebuyers a tax break on new homes — a figure first revealed in Thursday’s fall economic statement.
The government’s fiscal update shows it is projecting to spend $35 million this year, $190 million in 2026-27 and $245 million in 2027 to give first-time homebuyers a significant $80,000 discount on homes under $1 million.
Officials with the Ministry of Finance weren’t able to say how many people they expected to use the rebate. They said they had come up with the funds for the program based on housing starts data.
The number of people using the program is expected to rise over time, partly because the government hopes the tax rebate will encourage more builders to focus on $1-million or less starter homes.
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The discount, the government said, would only apply to purchasers who buy a new home as a primary residence. The province said it was looking to make the rebate available to buyers who signed a purchase agreement on or after May 27, 2025.
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Ontario’s pledge to waive its eight per cent harmonized sales tax will complement a similar offer from the federal government, allowing some first-time homebuyers not to pay any of the total 13 per cent HST on new homes.
The policy is aimed at homes worth up to $1 million, applying as a lower, phased offer for homes up to $1.5 million. The government said that, for example, a home built between $1.35 and $1.5 million would get a minimum rebate of $24,000.
While Ontario Finance Minister Peter Bethlenfalvy insists the program will only continue to grow in the subsequent years, the current funding would be enough to help 8,392 first-time homebuyers over three years – roughly 2,700 a year.
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Officials with the Ministry of Finance said the $470 million was a prediction of how much it will cost the government over the next three years, not how much the province is willing to spend.
A rebate of $80,000 per first-time homebuyer would mean the funds currently put aside are enough for a little under 6,000 people to use the rebate.
There is no cap, however, on how many people can benefit from the discount. If more apply, officials said, more funds will be unlocked.
The measure is designed to incentivize people who have stayed on the sidelines of an expensive and increasingly unaffordable housing market.
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Homebuilders have warned that sales for new build condos plummeted in 2025, creating a potential construction catastrophe in the years to come.
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