The federal government and Ontario are planning to spend $8.8-billion to reduce the province’s municipal real estate development charges by up to 50 per cent, offering another boost to home builders at a time when new home sales across the country have plunged.

The taxpayer funding is designed to allow municipalities to cut up to $200,000 in taxes and fees for a new home in Ontario, the governments said in a joint press release, marking the latest incentive designed to revive the homebuilding market.

Developers have long complained about the steady increase in development charges, which are fees municipalities require developers to pay to help cover the cost of providing infrastructure such as roads and sewage.

The development charges, along with higher borrowing and construction costs, have made it difficult for home builders to launch projects.