Toronto Just Cut Development Charges by Up to 60 Percent: What It Means for Etobicoke and Liberty Village Buyers

Market Insight Dave Dubbin July 27, 2026

Toronto is cutting the development charges on new homes by 40 to 60 percent, starting this year and running through 2029, backed by $1.5 billion in federal and provincial funding announced on June 23. Development charges are one of the biggest costs baked into the price of every new condo and house in the city, so this matters to anyone thinking about buying new in Etobicoke or Liberty Village. The honest caveat is that nobody can promise exactly how much of the saving reaches buyers, and we will get into that below.

Weighing a pre-construction purchase against resale? Talk to us first. We will walk you through the real numbers, no pressure.

What actually happened

On June 23 the City of Toronto, the province, and the federal government announced a $1.5 billion infrastructure deal. In exchange for that funding, the city committed to reduce residential development charges by 40 to 60 percent depending on the type of unit, from 2026 through 2029. The federal and provincial money backfills what the city would have collected, so the infrastructure those charges normally pay for, watermains, roads, parks, still gets funded.

What development charges are, in plain terms

Development charges are fees the city collects from builders on every new unit. Builders do not absorb them. They get passed into the purchase price the same way land and construction costs do. In Toronto, the charge on a new one bedroom condo has been sitting around $50,000 per unit, and industry estimates put development charges at somewhere between 8 and 16 percent of the price of a new condo in Ontario. That is a serious slice of what you pay.

The actual cuts

Here is how the reductions break down:

Studios and one bedroom units: 40 percent off the development charge
Two bedroom and larger units, plus singles and semis: 60 percent off
The reduced rates run through 2029

The city expects the program to unlock more than 44,000 new homes and deliver close to $2 billion in relief to homebuilders. Worth noticing: the deepest cut lands on family sized units, which is exactly the kind of housing the condo market has been short on for years.

Following what is being built around the west end? These three are worth a read:

Why this matters so much in Etobicoke

Etobicoke has one of the largest development pipelines in the city right now. The 13 tower proposal at 1255 The Queensway, the Mr. Christie site at Park Lawn, the towers planned around Kipling and Islington stations, and the Cloverdale Mall redevelopment together represent tens of thousands of potential homes. A lot of those projects have been moving slowly because the math stopped working for builders. Cutting development charges changes that math. Projects that were stalled start to pencil again, and the two bedroom units Etobicoke families actually need get the biggest reduction.

And in Liberty Village

Liberty Village is in a similar spot. The city passed its Liberty For All plan in June, and there are active proposals in the neighbourhood, including the tower application at the Carpet Factory. Lower charges plus a fresh city plan make it more likely that the next wave of Liberty Village projects actually gets built rather than sitting in a drawer.

Will new homes actually get cheaper?

The fair answer is: it depends on the market. There is no rule forcing builders to pass the saving on. What helps buyers right now is timing. CMHC released its mid year housing outlook this week, and it forecasts soft prices nationally this year with housing starts falling almost 7 percent. In a market where builders are competing hard for a smaller pool of buyers, savings tend to show up as sharper pricing, better incentives, and more flexible deposit structures. If you are shopping new construction, compare the per square foot price against comparable resale before you sign anything.

What to do with this if you are buying or selling

Buyers: this strengthens your position on new units, especially two bedrooms. Ask what incentives are on the table and get the full closing cost picture in writing. Sellers near the big corridors: more building activity over the next few years means more attention on your pocket of Etobicoke, and that can change what your property is worth. Either way, it is worth understanding before you make a move.