On November 4, 2025, the Liberal government tabled Budget 2025 in the House of Commons, its first budget for the Carney government. Branded as a “Build, Protect, and Empower” plan, it touches on many aspects related to Canadian sovereignty and also centers heavily on housing, infrastructure, and affordability. There are major commitments to Build Canada Homes, housing-enabling infrastructure, and targeted tax changes for new homebuyers as well as the rental supply.
The budget must still be debated and voted on in Parliament, and some measures will require enabling legislation and provincial or municipal agreements before they fully come into effect. It is very likely that some horse trading will take place and change certain aspects, but let’s review what’s in the budget and whether it is likely to help with housing affordability in Toronto and the GTA!
Give me the quick answer.
If you’re just looking for the short answer, the budget does help in some targeted ways, but (not surprisingly) it does not actually “fix” affordability for buyers and renters in Toronto and the surrounding region. We don’t know that any budget actually could do that, so the real question is how much does it actually help?
Budget 2025 is presented as a housing and infrastructure budget at a time when projects are stalling, carrying costs are high, and many GTA households have moved from “stressed” to “priced out.” It introduces a new federal housing agency, confirms tax relief for certain first-time buyers of new homes, commits significant funding for housing-enabling infrastructure, expands federal backing for housing finance, and removes the Underused Housing Tax. The Toronto Regional Real Estate Board (TRREB) has recognized these as steps in the right direction, while making it clear they are not enough on their own to restore a realistic path to homeownership in the GTA.
Let’s get into the nitty gritty now for each aspect, where we’ll tell you if we think it’s going to be good or bad for housing affordability in Toronto and the GTA. We’ll also bring up TRREB’s position on each topic for some additional context.
Build Canada Homes (BCH)
The budget creates Build Canada Homes, a new federal builder and financing body focused on affordable, non-market and mixed-income housing, using federal lands and more efficient construction methods, and partnering with other levels of government, non-profits and private developers. In Toronto and the GTA, this is expected to focus on transit-served and higher-demand areas where public lands and higher density make sense.
Good or Bad? This is good for long-term structural supply, especially for renters and lower-income households who are currently squeezed out of stable options in the GTA. If BCH delivers real projects quickly on real sites in and around Toronto, it can reduce pressure higher up the ladder. It is not automatically transformative, because success depends on municipal zoning, approvals and fees aligning with it. It would be more effective if BCH included some portion of the $13 Billion (over five years) funding for market-based housing, especially townhomes, duplexes, and family-sized apartments. At the recent CREA Political Advocacy Day in Ottawa, this is exactly what was requested in over a hundred meetings with current MPs.
GST Exemption for First-Time Buyers of New Homes
Budget 2025 confirms a GST exemption for first-time buyers of qualifying new homes up to a defined price threshold, with tapered relief above that level. The goal is to reduce upfront costs and make new construction more attainable for end users rather than investors.
Good or Bad? This is good for a specific portion of the GTA market, namely first-time buyers purchasing new condos or townhomes in parts of the 905 or in certain transit-oriented developments where prices fall within the eligible range. It does much less for many buyers in the City of Toronto and in higher-priced GTA communities where family-sized or centrally located homes already sit above the cap of $1M. Yes, there is a reduced HST rate for first-time buyers on new homes between $1,000,000 and $1,500,000, but the full exemption is only available if your purchase price is under $1 Million. TRREB has supported tax relief on new homes, but argued that limiting it to first-time buyers restricts its impact in markets like the GTA. As set up, it is a useful targeted benefit, but too narrow to materially shift overall affordability in Toronto.
Elimination of the Underused Housing Tax (UHT)
The budget eliminates the federal Underused Housing Tax starting with the 2025 calendar year, removing a complicated and often confusing measure that forced many owners, corporations and trusts into filings that did not clearly relate to true vacancy.
Good or Bad? This is good from an administrative and policy standpoint. In a dense, condo-heavy city like Toronto, it reduces red tape and the risk of accidental non-compliance for ordinary owners and legitimate investors. It does not significantly change affordability, because local taxes such as the Toronto Vacant Home Tax continue to operate. TRREB and others had criticized UHT as poorly targeted; its removal is a sensible correction, but it won’t have an effect on pricing and supply.
Housing-Enabling Infrastructure Funding
Budget 2025 commits a large national funding envelope over the coming decade for infrastructure that directly supports housing, including transit, water, wastewater, roads and community facilities, with a clear expectation that these investments be linked to housing outcomes. For Toronto and the GTA, where infrastructure capacity often constrains intensification, this is highly relevant.
Good or Bad? This is very good if the Ontario government and GTA municipalities deliberately connect this funding to higher density and faster approvals around subway, GO and LRT lines, as well as key growth centres. When used that way, it can reduce per-unit costs, unlock new sites and improve feasibility for both rental and ownership projects. If the money is allocated without strong ties to housing delivery, the effect on affordability will be weak. TRREB’s support for “housing enabling infrastructure” reflects this approach; whether this becomes a real win for the GTA depends on how firmly that principle is enforced.
Expanded CMHC Guarantees and Support for Multi-Unit and Rental Housing
The budget expands federal capacity to backstop housing-related lending, including more flexibility and room for CMHC guarantees and insured loans that support new housing supply, with a particular emphasis on purpose-built rental and multi-unit projects. For developers and institutional investors active in Toronto and the GTA, this can improve access to longer-term, lower-cost capital.
Good or Bad? This is good for getting more rental and multi-unit housing built or preserved in a challenging cost environment. In the GTA, where financing conditions can be the difference between a project proceeding or being cancelled, stronger federal backing helps. However, as TRREB and industry stakeholders continually point out, cheaper or better-structured financing does not overcome high development charges, community benefits, land costs and lengthy approvals in Toronto. These measures are supportive and necessary, but they work only if local cost and regulatory barriers are also addressed. They help increase potential supply, but they do not, by themselves, make homes affordable for the average buyer. Again, the focus is on supportive housing rather than market-based housing – and while supportive housing is crucial for our society, it makes up only 4% of the total housing stock in Canada.
Stronger Anti–Money Laundering Rules for Mortgage Intermediaries
The budget tightens anti–money laundering and anti–terrorist financing rules for mortgage brokers, private lenders and administrators. The aim is to improve transparency and reduce the role of opaque or high-risk capital in the housing system.
Good or Bad? In theory, this is good. For a global market like Toronto, stronger AML rules support integrity and public confidence. They help ensure that prices are shaped by real demand rather than distorted by questionable funds, particularly in more speculative or luxury segments. For ordinary buyers, end-user sellers and legitimate investors, however, the impact is largely procedural. It means more paperwork for lenders, so we may see a bit of a slow down in the overall processing of deals, which could cause some frustration.
How does all of this impact you if you’re thinking about buying in 2026?
If you are a first-time buyer looking at new construction within the qualifying price range, Budget 2025 can put meaningful money back in your pocket and make certain projects more viable options. It may nudge some developers to tailor product to stay within those thresholds, particularly in emerging transit-oriented communities around the GTA. If you are shopping for resale or for homes above the cap, the budget does not directly lower your costs. Your affordability will continue to be driven mainly by interest rates, local inventory and your own income and debt situation, not by these federal measures. The bigger supply benefits from Build Canada Homes and infrastructure funding will take time to show up and will not materially change 2025–26 pricing pressures in core Toronto.
What about if you want to sell in 2026?
Similar to what it does on the buy side, if you own in Toronto or the GTA and are considering selling, this budget does not introduce any new broad-based measures that directly target you. The elimination of the Underused Housing Tax simplifies things if your ownership structure is more complex, and a better-aligned infrastructure and supply push may, over time, support confidence and activity in the market rather than suppress it. In 2026 however, your experience will still depend more on the skillset of your realtor, local demand, listing competition and interest rate trends.
While most of the housing focused measures in Budget 2025 are what we’d consider good for housing affordability, it might be more accurate to say they aren’t bad for it. While there are broader elements that could eventually help with housing affordability, it lacks any strong, immediate measures that will directly impact the cost of homes in Toronto and the GTA.
Nothing in the budget, by itself, fixes the fundamental affordability problem faced by typical households in Toronto and the GTA. Prices and rents remain high relative to incomes, and the biggest structural issues—local costs, approvals, and the pace and mix of new supply—are only partly addressed. TRREB’s response reflects that reality: progress, yes; solution, not yet.
Here’s our final word on the topic. If you are trying to decide whether to buy, sell or invest in 2026, you should not wait for a “perfect” policy moment from any level of government – whether Federal, Provincial or Municipal. You should base your decision on your timeline, your finances and the specific opportunities in front of you.
We regularly work with our clients to decide what makes sense for them, considering what’s going to happen in the market as well as their specific situation. If that sounds like something that you need, then don’t hesitate to get in touch with us.
