Conservative head promises tax relief on new builds, targets housing affordability
Conservative leader Pierre Poilievre has promised to eliminate the federal sales tax on newly built homes priced under $1 million if his party wins the next election.
Poilievre made the announcement in an online video, criticizing the impact of government taxes on housing prices and arguing that the tax cuts would make homeownership more affordable while spurring construction.
“The number one cost for a home is government: government bureaucrats, government taxes, government gatekeepers,” Poilievre said in a press conference, asserting that the Conservative plan would bring down home prices and stimulate new builds.
According to Conservative estimates, scrapping the federal sales tax on new homes priced at $800,000 would save buyers around $40,000 and reduce annual mortgage payments by $2,200.
The plan is also expected to encourage the construction of 30,000 additional homes annually, with Poilievre pointing to the economic ripple effects, including more income for construction workers and an additional $2.1 billion in revenue for the government.
“We’re going to get billions of dollars in additional revenue from the fact that construction workers and businesses are making more money building more homes,” he said.
Poilievre has been vocal about housing affordability since becoming Conservative leader in 2022, often criticizing the Liberal government’s policies. He pledged to offset the tax cut by dismantling existing Liberal programs, including the Housing Accelerator Fund and the Housing Infrastructure Fund, both of which incentivize cities and provinces to adopt housing-friendly policies in exchange for federal funding.
The proposal received support from the Residential Construction Council of Ontario (RESCON). Richard Lyall, president of RESCON, praised the plan as a step toward lowering housing costs, particularly in high-tax areas like the Greater Toronto Area.
“Taxes on new housing in the Greater Toronto Area, for example, are the highest in North America and have combined with other factors to push the cost of new homes beyond affordability for many, especially first-time homebuyers,” Lyall said in a statement. “This move is a step in the right direction.”
Under current federal rules, new homes priced up to $350,000 are eligible for a partial GST rebate, with the rebate phasing out entirely for homes over $450,000. The Conservatives’ plan would remove the full 5% GST on homes priced under $1 million, offering maximum tax savings of $50,000 for eligible buyers.
Read more: Federal government removes GST from new apartment construction
Poilievre argued that Canada’s high tax burden on new home construction, estimated to have risen from 24% of a home’s price in 2012 to 31% today, has put homeownership increasingly out of reach for Canadians.
A report from the Canadian Centre for Economic Analysis found that taxes on new home construction are roughly double those in other sectors, significantly impacting affordability.
“These taxes are ultimately passed on to new home buyers,” Lyall noted, adding that many buyers are left financing these costs over long-term mortgages, which results in thousands of dollars in additional interest costs.
“The tax burden is preventing many people from buying a new home, and many are leaving our cities,” he said. “The plan put forward by the Conservatives is forward-thinking and should help restore balance to the market.”
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