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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 across, 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.”
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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 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.
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