By Allison Jones

Ontario is planning to temporarily expand HST rebates on the purchase of new homes, in a bid to boost a struggling home construction sector.

The government previously introduced rebates for first-time homebuyers on new homes valued up to $1.5 million, with homes valued at $1 million or less qualifying for the maximum amount of $130,000 when combined with a federal rebate.

Now, Premier Doug Ford is announcing that in Thursday's budget, his government is proposing to expand the rebate for one year, both in terms of qualifying home purchases and not limiting it to first-time home buyers.

The temporary measure would see homes valued up to $1.5 million qualify for the maximum $130,000, decreasing proportionally to homes valued at $1.85 million, which would qualify for $24,000.

"My message to everyone from the building sector here today is very simple: start building," Ford said at a press conference.

"To the great people of this province, if you're in the position to buy a new home, no matter if it's a condo or town home or a detached home, please get everything together. You have one year to see this $130,000 reduction in cost. Please go out there, talk to your bankers and start buying the homes." 

The province says the federal government is covering the five per cent federal portion of the HST, in a move Ontario says would provide nearly $2.2 billion in tax relief for housing in Ontario.

The Ministry of Finance estimates the measure will spark an additional 8,000 housing starts, at a time when the most recent government projections show the province building 70,000 new homes this year, far off the pace needed to meet a goal of 1.5 million homes in 10 years.

Representatives of the home construction industry said the move will help restore momentum in the housing market.

"At a time where we are facing huge economic uncertainty and a slowing housing industry, this is a major step toward unlocking affordability in Ontario's housing market and supporting the broader economy," Dave Wilkes, president and CEO of the Building Industry and Land Development Association wrote in a statement. 

"This is great news for both new home purchasers and the 100,000s of workers in our industry." 

The expanded rebate will be available from April 1 this year to March 31, 2027.

(C) The Canadian Press