TORONTO – Abolish the federal sales tax on “sustainable” new real estate construction, to reduce mortgage costs and speed up home construction. The proposal was launched today by Conservative leader Pierre Poilievre: at a press conference in Ottawa he announced that, if elected prime minister, he would cut sales tax on new homes sold for less than $1 million.
“Axe the sales tax on homes”, he said: according to the Conservative leader, this tax cut could save Canadians $40,000 in total or $2,200 a year in mortgage payments on an $800,000 home and help build 30,000 new homes each year.
As Global News recalls, in Canada home buyers must pay GST/HST when purchasing a new home directly from the builder, while – according to the Canada Revenue Agency – sales of owner-occupied used homes are generally exempt from GST/ HST. “ In most cases, the GST/HST does not apply to the sale of an owner-occupied home since the owner is not a builder. Only homes sold by builders are taxable. An individual who builds, substantially renovates or buys a home for their personal use and not as a business or adventure in the nature of trade is not considered to be a builder for GST/HST purposes” the CRA states on its website (here).
The issue of housing is particularly “hot” and the electorate is very sensitive about it, so much so that the federal government has recently taken a series of measures to recover the ground lost – a lot – compared to the Conservatives, in terms of popularity: starting from December 15, first-time home buyers, as well as those purchasing new construction, will be able to take out mortgage insurance with a 30-year amortization, compared to the typical repayment period of 25 years; last month, Deputy Prime Minister and Finance Minister Chrystia Freeland said the price limit for mortgage insurance delivery will be increased to $1.5 million from the previous limit of $1 million; last week, the federal government announced reduced immigration targets for the next three years, which some experts say will impact housing affordability as early as next year; and the Liberal government plans to build nearly 3.9 million homes by 2031 as part of a housing plan unveiled earlier this year (the parliamentary budget manager estimated that Canada would need to build 3.1 million homes by 2030 to fill the housing gap).
Now, the Conservatives’ proposal to eliminate the tax on homes sold (directly by builders) for less than $1 million. The electoral campaign is already in full swing.
In the pic above, Pierre Poilievre during today’s press conference (from the video broadcast on his Twitter X page – @PierrePoilievre)
