Ottawa, ON — Less taxes will have to be paid by first-time homebuyers looking to purchase a home at or under $1 million. The announcement by the federal government will see the elimination of the “Goods and Services Tax,” or better known as GST, for first-time homebuyers. The Canadian Home Builder’s Association (CHBA) and the Residential Construction Council of Ontario (RESCON) both applaud the announcement.
“We are pleased that two major federal parties have made substantial promises regarding GST on new homes. In light of the tariff war with the United States, it is doubly important that all avenues to improve housing affordability for Canadians are explored. Addressing the GST on new housing is certainly a step in the right direction in ensuring Canada has a comprehensive plan to support better housing affordability and supply in the face of increasing construction costs, and is long overdue,” said Kevin Lee, CEO of CHBA.
Last fall, the federal conservative party proposed legislation that would remove the GST on new homes under $1 million. On March 25, the federal conservatives introduced new legislation that would increase the amount to $1.3 million. As mentioned by RESCON, the benchmark price for a new home in the City of Toronto is now $1.089 million.
RESCON adds that, “The Conservatives say axing the GST will save homebuyers up to $65,000 on the purchase of an average home in our big cities and roughly $3,000 every year in mortgage payments.”
The CHBA adds that this move will help make housing more affordable for those looking to buy their first home and spur the creation of more housing supply, which is much needed.
CHBA has also argued that, while a permanent move, GST relief is especially significant now as it will help counter price increases due to tariffs.