Coalition advocates for policy changes to boost affordable housing efforts
Real estate organizations are pressing the Canadian government to extend rent tax breaks to include non-profit affordable housing, arguing that the current system is hindering efforts to provide more affordable homes.
The Toronto Regional Real Estate Board (TRREB), Canadian Real Estate Association (CREA), and Ontario Real Estate Association (OREA) have collectively called on federal and provincial governments to expand the existing GST/HST rebate, which currently exempts only purpose-built rental housing, to also cover non-profit affordable ownership homes.
In a letter, the groups urged the federal and provincial governments “to move quickly to expand the HST/GST relief now in place for purpose-built rentals to also include non-profit affordable ownership housing.”
The letter outlined the financial strain that the GST/HST places on non-profit housing projects, particularly in high-cost areas like the Greater Toronto Area (GTA). The tax adds approximately $80,000 to the cost of each home built by organizations such as Habitat for Humanity, limiting their ability to expand their impact.
The groups said that if the tax were lifted, Habitat could potentially build 13 additional homes for every 100 currently constructed.
Read more: Habitat for Humanity adjusts income threshold amid soaring housing costs
The real estate associations added that the revenue loss for the government would be minimal, estimating that exempting non-profit affordable homes from GST/HST would reduce tax revenues by just 0.1% to 0.5% on new homes.
“The economic value of an HST/GST exemption could be retained as part of the second mortgage in non-profit affordable homeownership programs, thus avoiding any financial windfall at time of sale for homeowners,” the letter read.
They also proposed the option of a tax deferral, where the GST/HST would only be paid if and when the home is sold on the open market.
By advocating for these changes, TRREB, CREA, and OREA hope to see more affordable homes built across Canada.
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