Annex: Details of Tax Measures and Other Legislative Initiatives

Overview

This Annex contains detailed information on certain tax measures and other legislative initiatives the government proposes in this document or has recently implemented.

Lowering the Cost of Capital Investments in Ontario

The government intends to permanently lower the cost of capital investment in Ontario, in parallel with the proposed federal Productivity Mega Deduction announced in September 2026. These measures build on those announced in the 2026 Budget by expanding the range of capital assets eligible for immediate writeoffs on a permanent basis. These measures would apply to eligible capital assets acquired on or after September 15, 2026, and would take effect following the passage of corresponding federal legislation.

These changes, taken together, would accelerate depreciation deductions for a broad range of eligible capital assets, including:

• Immediate 100 per cent writeoffs on a permanent basis for most eligible depreciable property, including manufacturing and processing (M&P) machinery and equipment, certain clean technology property, zero-emission vehicles, greenhouse buildings, and productivity enhancing assets;
• Immediate 100 per cent writeoffs on a permanent basis for certain qualifying new vehicles assembled in Canada;
• Immediate 100 per cent writeoffs on a permanent basis for certain liquefaction equipment used in liquefied natural gas facilities;
• Immediate 100 per cent writeoffs on a permanent basis for Canadian development expenses;
• Immediate 100 per cent writeoffs for M&P buildings, with a phase-out after 2029;
• Accelerated depreciation from 4 per cent to 10 per cent for purpose-built rental housing for construction completed before January 1, 2036; and
• Accelerated first-year deductions of up to three times the regular amount for most other depreciable assets with a phase-out after 2029.

The measures exclude certain buildings (including M&P buildings), passenger and motor vehicles not mentioned above, intangible property, regulated natural gas distribution pipelines, and property depreciated under Schedules V and VI of the federal Income Tax Regulations.

Consistent with the federal Productivity Mega Deduction, immediate expensing measures would generally apply to eligible depreciable property acquired on or after September 15, 2026, that is subject to capital cost allowance rules. Certain measures would be subject to different effective dates and conditions.

Measures related to the proposed Productivity Mega Deduction and immediate expensing for M&P buildings would take effect following the enactment of the relevant federal legislation.

Enhancing Support Through Ontario’s Research and Development Tax Credits

Ontario is restoring the eligibility of certain capital expenditures for the purposes of the Ontario Research and Development Tax Credit and the Ontario Innovation Tax Credit, consistent with recent changes to the federal Scientific Research and Experimental Development program.

Eligible businesses could claim qualifying capital expenditures, including software and hardware testing tools, high-performance computing equipment, prototyping equipment, and certain property or lease costs, in addition to eligible labour expenditures incurred in support of research and development activities in Ontario.

This change took effect in Ontario automatically when the corresponding federal legislation (within Bill C-15) received Royal Assent on March 26, 2026. The expansion includes allowing capital expenditures on property acquired on or after December 16, 2024, to be eligible for the tax credits.

Providing Temporary Enhanced Harmonized Sales Tax Relief for New Homes

As announced at the time of the 2026 Budget, the Ontario government is providing temporary Harmonized Sales Tax (HST) relief of up to $130,000 for eligible buyers of new or substantially renovated homes. The measure consists of two components. The first component comprises the Ontario Enhanced New Housing Rebate (ENHR) and the Ontario Enhanced New Residential Rental Property Rebate (ENRRPR). The second component is the Ontario New Home Affordability Payment (ONHAP).

The ENHR and ENRRPR are temporary rebates that provide relief of up to $80,000 on the 8 per cent provincial portion of the HST when combined with Ontario’s existing New Housing Rebate and New Residential Rental Property Rebate. The rebates are generally available for the purchase of a home from a builder between April 1, 2026, and March 31, 2027.

Anyone who is eligible for and receives the ENHR or ENRRPR is also eligible for the ONHAP. The ONHAP provides top-up relief of up to $50,000, equivalent to up to 100 per cent of the 5 per cent federal portion of the HST.

The total combined relief depends on the new home value:

• Up to $1 million: 100 per cent of the 13 per cent HST paid, up to $130,000;
• Above $1 million and up to $1.5 million: flat amount of $130,000;
• Above $1.5 million and below $1.85 million: partial relief of the HST paid; and
• $1.85 million and above: only the existing Ontario new housing rebate or new residential rental property rebate of up to $24,000 is available.

The ONHAP payment is reduced by the federal portion of any HST rebate that the person may be entitled to claim, including the federal HST First-Time Home Buyers’ Rebate.

Applications can be made through Canada Revenue Agency (CRA) forms for the ENHR and ENRRPR. No separate Ontario application is required for the ONHAP. Ontario is expected to begin issuing ONHAP payments to eligible recipients in early 2027.

Eliminating the Harmonized Sales Tax New Housing Rebate and New Residential Rental Property Rebate

As announced in the 2026 Budget, the Ontario government is proceeding with the elimination of the New Housing Rebate (NHR) and New Residential Rental Property Rebate (NRRPR). The NHR and NRRPR currently provide rebates of 75 per cent of the provincial portion of the HST on the first $400,000 in value of a new home or rental unit, up to a maximum rebate of $24,000. The NHR and NRRPR will generally become unavailable for new purchases and transactions that begin on or after April 1, 2027, which generally coincides with the end of the eligibility period for the ENHR and the ENRRPR.

Elimination of the NHR and NRRPR will not impact eligibility and relief amounts for temporary new housing relief offered by Ontario.

The NHR will remain available under the conditions below:

• New homes purchased from a builder: If the agreement of purchase and sale for the home was entered into between the individual and the builder on or before March 31, 2027;
• Owner-built homes: If construction or substantial renovation of the home begins on or before March 31, 2027; and
• Shares of a co-operative housing corporation: If the agreement of purchase and sale for the share of a co-operative housing corporation was entered into between the individual and the co-operative housing corporation on or before March 31, 2027.

The NRRPR will remain available under the conditions below:

• Residential complexes purchased from a builder: If the agreement of purchase and sale for the residential complex was entered into between the person and the builder on or before March 31, 2027; and
• Landlord-built residential complexes: If construction or substantial renovation of the residential complex, or addition to a residential complex, begins on or before March 31, 2027.

For both the NHR and NRRPR, tax must become payable no later than December 31, 2035. For example, for homes purchased from a builder, the transaction must close (i.e., ownership transferred) by December 31, 2035.

If, under an assignment sale, a person (the assignee) assumes the rights and obligations of another person that is a purchaser of a new home (the assignor) under an agreement of purchase and sale with a builder, the NHR or NRRPR will only remain available if:

• Both the original agreement of purchase and sale and the assignment agreement were entered into on or before March 31, 2027; and
• All other eligibility criteria in relation to the application of the rebate to the specific transaction are met.

Preserving Municipal Tax Flexibility for Affordable Housing

The government continues to modernize the property tax and assessment system and help municipalities attract investment that best serves the needs of the people of Ontario. In the context of that effort, the government recognizes the evolving property tax treatment of affordable housing properties arising from recent court cases. The government is proposing to implement a temporary pause on the implications of the court decisions to allow time to consult directly with affordable housing providers and municipalities regarding potential amendments to the Assessment Act. These amendments would aim to modernize the legislation, while ensuring that municipalities retain the authority to grant property tax relief for affordable housing.

Streamlining Municipal Education Property Tax Remittances

In the 2026 Ontario Budget, the government announced plans to streamline education property tax remittance processes for municipalities and school boards, beginning in 2028. This measure would significantly reduce the number of transactions between municipalities and school boards and thereby lessen both the administrative burden and costs. Legislative amendments to the Education Act, Municipal Act, 2001, City of Toronto Act, 2006 and Assessment Act are being introduced to implement the streamlined process. The government will continue to work closely with municipalities and school boards in implementing these changes.

Providing Transparency Through a Centralized Online Property Assessment Roll

Building on the 2024 Ontario Economic Outlook and Fiscal Review commitment to explore enhancing access to property assessment information, the government is modernizing the current assessment roll viewing process. Currently, viewing the property assessment roll generally requires individuals to visit their municipal office in person. Legislative amendments are being proposed to enable the Municipal Property Assessment Corporation (MPAC) to deliver a centralized electronic platform for public access to select property assessment information online, thereby enabling modern accessibility and uniformity of service across the province. If the proposed amendments are passed, this new MPAC-delivered service is expected to become available in mid-2027. 

The province also continues to work with MPAC and municipalities to identify opportunities for enhancing the property assessment information available to municipalities for a variety of different purposes. 

Providing Assessment Stability

The government continues to ensure that the property assessment and taxation system is working effectively for Ontario businesses and families, while providing stability in challenging economic circumstances. To that end, the provincewide reassessment will continue to be deferred to ensure stability for taxpayers.

Improving the Presentation of the Taxation Transparency Report

The annual Taxation Transparency Report publishes the estimated annual cost of expenditures delivered through the tax system, as required under the Fiscal Sustainability, Transparency and Accountability Act, 2019. To enhance fiscal transparency, support independent analysis and improve alignment with the presentation of fiscal data, the government is improving the Taxation Transparency Report beginning with the 2026 edition.

The report will now present the estimates for the current year and include revised estimates for the three previous years. These revised estimates will reflect the latest taxation and economic data.

This expanded format will facilitate comparison of expenditures made through the tax system over time and better align with the time periods presented in fiscal tables detailing total revenue and expense in the 2026 Ontario Budget and the 2026 Ontario Economic Outlook and Fiscal Review.

Advancing Ontario’s Beneficial Ownership Registry

Ontario is proposing legislative amendments that support the implementation of a Beneficial Ownership Registry (BOR) for privately held business corporations in 2027.

The amendments would establish requirements for collecting, filing, accessing, disclosing and protecting beneficial ownership information. Privately held business corporations are already required to maintain information about individuals with significant control. This information is not currently filed through a centralized provincial registry.

• Proposed amendments to the Business Corporations Act would require corporations to collect additional identifying information about individuals with significant control, including citizenship and, where provided, an address for service. They would also expand reporting exemptions to include certain wholly owned subsidiaries whose parent entities are already subject to transparency and reporting requirements, with the ability to expand exemptions, as necessary, through regulation.
• Proposed amendments to the Corporations Information Act would require privately held business corporations to submit their information about their individuals with significant control to the registry, provide the public with limited access to the information, and provide full access to authorized entities such as law enforcement, and regulatory bodies. Appropriate safeguards are also proposed to protect privacy.

Summary of Measures

Technical Amendments

Amendments are being proposed to various statutes administered by the Ontario Minister of Finance, and other statutes, to improve administrative effectiveness or enforcement, maintain the integrity and equity of Ontario’s tax and revenue collections system, or enhance legislative clarity or regulatory flexibility to preserve policy intent.

Proposed legislative amendments include:

• Amendments to the Taxation Act, 2007 to clarify the tax credit for minimum tax.
• Amendments to the Land Transfer Tax Act to:
• modernize the rules for the service of documents by explicitly permitting email or other prescribed forms;
• clarify that the Crown or a Crown Agency is exempt when it is the only transferee, even if only acquiring an unregistered beneficial interest in land; and
• strengthen the integrity of the refund for first-time homebuyers by increasing penalties for false or misleading statements in applications for the refund from $4,000 to $10,000.
• Amendments to the Assessment Act to:
• repeal spent provisions, enhance legislative clarity and update and modernize terms used in the Act; and authorize the Minister of Finance to prescribe, by regulation, a later date for the Municipal Property Assessment Corporation to deliver notices of assessment than otherwise required under the Act.
• Amendments to the Education Act to repeal spent provisions, enhance legislative clarity and update and modernize terms in the Act.
• Amendments to the Municipal Act, 2001 and City of Toronto Act, 2006 to repeal spent provisions and to clarify the calculation of the capped amount of taxes applicable to a property where taxes levied on the property were refunded, reduced or cancelled in the previous year.
• Amendments to the Securities Act and Commodity Futures Act to remove references to “members of the Commission” that have been made redundant by the Securities Commission Act, 2021.
• Amendments to the Credit Unions and Caisses Populaires Act, 2020 to clarify the application of certain orders made under the Securities Act.

Other Legislative Initiatives

Additional proposed legislative initiatives include:

• Amendments to the Ministry of Revenue Act to support more efficient administration of Ontario’s tax and revenue collection. The proposed changes would remove certain regulatory requirements that currently apply to collection services and analysis of information, reducing administrative burden and enabling these agreements to be established more efficiently while maintaining existing safeguards.
• Amendments to the Capital Investment Plan Act, 1993 to include a confidentiality provision with respect to the Ontario Financing Authority’s Treasury Operations Services that would prevail over the Freedom of Information and Protection of Privacy Act.
• Amendments to the Building Ontario Fund Act, 2024 to clarify the Minister’s authority over the Crown agency status of the Building Ontario Fund’s subsidiaries.