On October 15, 2026, the federal and Ontario governments announced up to $19.6 million for St. Thomas through the Development Charge Reduction Program. You may see headlines saying the government is now paying builders' fees. That's not quite it. The city has agreed to charge builders less, and the province and Ottawa are paying the city back for the money it gives up.
Weighing a New Build Against a Resale Home in St. Thomas?
I'll put them side by side on total cost and tell you which one I'd want, and why
548 490 4577What exactly was announced?
| Item | Detail |
|---|---|
| Funding to the city | Up to $19.6 million |
| Program | Canada-Ontario Development Charge Reduction Program |
| Cut for single-detached and multi-unit housing | 30% |
| Cut for other residential unit types | 50% |
| How long the cut lasts | March 30, 2026 to March 31, 2029 |
| Estimated saving to build a new home | Up to $5,961 per home |
| What the money pays for | Design and construction of a new wastewater treatment facility |
| Homes the city says it could unlock | 6,196 |
| Still to come | A signed Transfer Payment Agreement between the city and Ontario |
The program sits inside a larger Canada-Ontario housing infrastructure deal worth $8.8 billion over 10 years. Cities that join have to hold their development charge cuts for at least three years, which is why the St. Thomas cut runs to March 2029.
What are development charges, and who pays them?
Development charges are one-time fees a city collects on each new home to help pay for the roads, pipes and plants that growth needs. In St. Thomas they're due when the builder pulls a building permit. The builder pays them, but the cost ends up baked into the price of the home, which is why cutting them is meant to help affordability.
They don't apply when a resale home changes hands. If you're buying or selling an existing house, you'll never see a development charge on your closing statement.
For the full breakdown of how development charges, property taxes and the PowerCo plant fit together, see my earlier post on St. Thomas growth and taxes, linked at the bottom of this page.
How much will this actually save on a new home?
Ontario's number is up to $5,961 per home. Read the "up to" carefully. That's the most a single home could see, not the typical saving, and it depends on the type of home and where in the city it's built.
To keep it in proportion: on a new home in the $550,000 to $700,000 range, $5,961 is around 1% of the price. It's real money, and it helps builders get projects to pencil out, but it won't change what you qualify for at the bank on its own.
Some homes may already have been permitted under the cut. It started on March 30, 2026, before the announcement. If you're buying from a builder, ask whether your home's permit was issued under the reduced rate.
Is the cut already in effect?
The city committed to the reduced rates starting March 30, 2026, but the press release says the funding still depends on St. Thomas signing a Transfer Payment Agreement with Ontario and meeting the program's rules. I haven't seen confirmation that the agreement is signed yet.
If you're about to buy new, or you're building yourself, call the City of St. Thomas building department and ask for the development charge rate in force today. The city's public schedule online hasn't always been the most current version, so get the number from the city, not a website.
Will new homes in St. Thomas get cheaper?
Maybe a little, but don't count on the full saving showing up in the price. Builders set prices based on what the market will pay, what land cost them and what nearby projects are asking. Some will pass the saving on, some will use it to keep a project going, and some will offer it as incentives instead, like upgrades or help with closing costs.
What does matter is that it stacks with other help that only applies to new builds. First-time buyers buying from a builder can now claim GST/HST rebates on homes up to $1 million, and Ontario has a temporary enhanced rebate for agreements signed between April 1, 2026 and March 31, 2027. Put those together and a new build can come out closer to a comparable resale home than the sticker prices suggest.
What should buyers do with this?
- Compare new and resale side by side, on total cost: price, HST and rebates, closing adjustments, and what you'll spend after you move in (blinds, appliances, landscaping, a fence).
- Read the adjustments schedule in any builder agreement. Some agreements charge the buyer if development charges or other levies go up before closing. With rates going down, ask what happens in that direction too.
- Ask the builder directly whether the reduced rate applies to your lot, and whether they're passing any of it on.
- Don't stretch your budget because of a saving that's "up to" a number. Get pre-approved on the real price.
What does it mean if I'm selling in St. Thomas?
If your home is a newer townhouse or a detached home in a newer subdivision, you're selling against builders as well as other homeowners. Cheaper fees and new-build tax rebates give builders more room to hold prices or sweeten their offers. That makes it harder to defend a price based only on what similar homes sold for last spring.
Before you set a price, look at what builders nearby are asking right now, and what incentives they're offering, not just resale comparables.
Older homes in established parts of St. Thomas compete less directly with new builds. Buyers who want a mature lot, a walkable street or character usually aren't cross-shopping a new subdivision.
Why is the money going to a wastewater plant?
Because pipes and treatment capacity, not land, are what limits how many homes St. Thomas can approve. The city is growing quickly, with the PowerCo battery plant under construction and new subdivisions going in. A new wastewater treatment facility is what lets more homes get serviced and approved. That's where the city's estimate of 6,196 homes comes from: it's capacity the plant could open up, not homes that are approved or under construction.
Frequently asked questions
Do development charges affect resale homes in St. Thomas?
No. Development charges are paid once, when a new home gets its building permit. Buying or selling an existing home doesn't trigger them, so this cut won't show up in a resale deal. It can still affect resale prices indirectly, because new homes are the competition.
How long will the St. Thomas development charge cut last?
From March 30, 2026 to March 31, 2029. The program requires the city to keep the cut in place for at least three years. What happens after March 2029 hasn't been announced.
Does the $5,961 saving go to the buyer?
Not automatically. The saving goes to whoever pays the development charge, which is the builder. Whether any of it reaches you depends on the builder's pricing and incentives. Ask the builder in writing whether the reduced rate applies to your home and how it's reflected in the price.
Sources: Government of Canada news release, October 15, 2026; Ontario's announcement via Wire Service; and AMO's summary of the Development Charge Reduction Program. Links below.
