HST relief may bring more rental supply

Ontario is trying a short-term approach to ease housing affordability.

On March 25, Premier Doug Ford announced a temporary break on Harmonized Sales Tax (HST) for buyers of new homes. From April 1, 2026 to March 31, 2027, the province will completely remove the 13% HST on newly built homes valued up to $1 million, with a maximum rebate of $130,000.

The goal is straightforward: cut one of the biggest upfront costs for buyers and encourage more building. The province estimates this tax break could help drive an additional 8,000 housing starts in 2027.

For the rental market, there are two potential upsides.

First, lower homeownership costs and increased housing supply could take some pressure off rents. When landlords face fewer upfront expenses, they can achieve their desired return at a lower rent, which can help with affordability, retention and overall stability.

Second, the incentive may attract new investors. Some buyers may enter the rental market without plans to self-manage, creating opportunities for property managers to step in.