Conservative Leader Pierre Poilievre has announced that his party will nix the goods and services tax on new homes under $1.3 million if he wins the federal election, a move he says will save Canadians up to $65,000 and benefit the middle class in pricier cities like Toronto and Vancouver.
This comes just two days after interim Prime Minister Mark Carney called a snap election for April 28, 2025. Carney himself pledged on Friday that the Liberals would eliminate the GST on new homes under $1 million for first-time buyers.
Poilievre said in a campaign video posted to his social media accounts on Tuesday morning that in addition to saving buyers up to $65,000 on the purchase of an average home in a big city, dropping the federal sales tax would “equal to savings of up to $3,000 in annual mortgage payments.” He also said the tax cut would lead to 36,000 addition homes being built each year, generating $2.52 billion in income taxes from construction workers and businesses.
“We will also incentivize municipalities to free up land, speed up permits, and cut development charges to build 15% more per year,” he said. “Under my plan, a young couple in Surrey, a single mom in Oshawa, a tradesman in Regina, will all be able to get on the housing ladder just like their parents did.”
Poilievre already vowed to waive the sales tax on new houses under $1 million in late-October, and at that time, he said that it would bring down the cost of an $800,000 home by $40,000, and spur the construction of 30,000 additional homes each year. To help fund the tax cut he said the Conservatives would concurrently get rid of the Housing Accelerator Fund and Housing Infrastructure Fund, calling them ineffective and purely bureaucratic, saving the government roughly $8 billion.
Though the proposed policy lever was well-received, Economist and Executive in Residence at the Smart Prosperity Institute Mike Moffatt told STOREYS in January that it “[leaves] out the Greater Toronto and Greater Vancouver areas where housing, even entry-level housing, could be over a million dollars.”
Moffatt said at the time that he would like to see the Conservatives “phase-out” the rebate to homes under $1.5 million, so that it would cover more homes in pricier regions. In addition, he expressed his opposition to implementing the tax cut at the expense of the Housing Accelerator Fund and Housing Infrastructure Fund, saying that “the core idea of these programs is sound” though they could benefit from “better oversight.”
"Listening to industry"
Tuesday's announcement is being applauded by development sector stakeholders, and the Residential Construction Council of Ontario (RESCON) said in a statement that extending the proposed waiver to include new homes under $1.3 million “more accurately reflects market realities.” Meanwhile, President and CEO of Republic Developments Matthew Young says that the Conservatives have shown that they’re “listening to industry.”
“It's less about the policy, it's more about the action,” says Young, who is also Chair of the Coalition Against New-Home Taxes (CANT). “When we launched our campaign last year, we had encouraging meetings with many levels of government, and the first leadership in government that wanted to do anything was Pierre Poilievre, and they came out with a policy on GST. We then highlighted some of the issues with the policy, and they've now come back and corrected the policy and adjusted it.”
“There's still little things that can be done, and it's still not perfect, but they've adjusted in the right direction,” Young adds.
Meanwhile, the signature commitment of CANT is that the 30 or so builders that form the coalition (including Republic, Alterra, Altree Developments, MOD Developments, Stafford, Republic Developments, and Harlo Capital, just to name a few), will drop their prices “dollar for dollar” for any tax savings achieved by any level of government on the cost of delivering new housing.
“So if this policy were to be introduced and become law, on call it a $1.25-million home, we would save $62,500 in GST. And so the price of that home would drop from $1.25 million to $1,187,500,” says Young. “We are committed to doing that, and as soon as a policy like this gets implemented, our coalition is going to be very public about announcing price cuts on our projects as a result of these changes.”
According to Young, CANT will be issuing a formal statement that lays out the potential cost savings for homebuyers later today.
“We're hopeful that provincial governments across the country are looking at this, seeing how positive this is, and looking at doing their share and their part, which is the PST component of the HST. And if they can reduce that as well, that would have an even more positive impact on reducing the pricing of housing,” he says. “And that's something that can be done today.”
