Ontario 2026 Budget Highlights: Tax Credits and Rate Changes

Key takeaways

• Ontario's 2026 budget extends the Ontario Staycation Tax Credit for another year
• The credit remains 20% of eligible Ontario accommodation expenses, up to $1,000 per family
• Maximum credit is $200 per person, $400 for a family
• Short-term rentals (Airbnb, VRBO) qualify if the stay is in Ontario and less than 30 days
• Keep all receipts showing HST paid — that is required for the credit

Ontario's 2026 budget, tabled in March, confirmed the Staycation Tax Credit will continue for the 2026 tax year. The credit was introduced as a temporary measure to support Ontario's tourism sector after COVID-19 closures, but has now been renewed for a fourth year.

How the credit works

The credit is 20% of eligible accommodation expenses paid for leisure stays in Ontario. Single taxpayers can claim up to $1,000 in expenses for a maximum credit of $200. Families (spouses/common-law partners and their minor children) can claim up to $2,000 in expenses for a maximum credit of $400.

To qualify, the accommodation must be in Ontario, the stay must be for leisure (not work), and you must have a receipt showing the HST registration number of the accommodation provider. Hotel, motel, resort, lodge, bed and breakfast, campground, and short-term rentals (Airbnb, VRBO) all qualify.

Other 2026 Ontario budget highlights

Beyond the staycation credit, the 2026 Ontario budget introduced a $200 one-time rebate for lower- and middle-income earners, continued the seniors property tax relief program, and expanded the Low-income Individuals and Families Tax credit (LIFT) by raising the income threshold.

Ontario maintained the employer health tax exemption threshold at $1 million for small businesses and did not change provincial income tax brackets, which are now indexed annually to Ontario's consumer price index.

Claiming the credit

Claim the Ontario Staycation Tax Credit on line 63052 of your 2026 Ontario income tax return (Schedule ON428). You do not send receipts with your return, but keep them for six years in case the CRA asks for documentation. The credit is refundable — you receive it even if your Ontario tax payable is zero.