Major discounts are in store for Ontario homebuyers who are looking to purchase a new build, as Premier Doug Ford announced this week that the province would extend sales tax breaks to more buyers.
Under the new rules, anybody purchasing a home that they intend to live in or rent out will be eligible for a tax break of up to $130,000 or 13 per cent of their home’s value. The full federal-provincial harmonized sales tax exemption is for newly constructed homes up to $1-million in value, while a partial tax break will be given to homes up to $1.5-million.
It marks an expansion of the provincial and federal government’s previous sales tax exemption, which applied only to first-time buyers. The new rebate will be available over the next year and will start with purchase agreements signed April 1.
Federal Housing Minister Gregor Robertson has told Canadians to “stay tuned” about the possibility of similar expansions of the tax break in other provinces.
Developers say the new rules could be a “game changer” to help spur homebuilding at a time when many projects have been cancelled because of a lagging market and high building costs.
The discount also comes amid expectations that mortgage rates could be in store for a spike.
Last week, the Canada five-year bond yield hit its highest level since late 2024 at 3.3 per cent. Some economists are also forecasting multiple Bank of Canada rate hikes this year as a result of continuing conflict in the Middle East.
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