<\/p>\n
Ontario Construction News staff writer<\/p>\n
Eliminating federal sales tax on new homes priced under $1 million is a step in the right direction that will reduce costs and stimulate demand for new homes, according to Ontario builders.<\/p>\n
The plan to cut the tax was announced by federal Conservative leader Pierre Poilievre last week.<\/p>\n
\u201cWe commend Opposition Leader Pierre Poilievre and his party for proposing this plan to remove the GST and encouraging provinces to follow suit, as it will save buyers tens of thousands of dollars on new home purchases,\u201d said RESCON president Richard Lyall. \u201cBuilders have long urged both federal and provincial governments to abolish sales taxes to reduce new housing costs and stimulate residential development.\u201d<\/p>\n
The West End Home Builders Association and Canadian Home Builders Association have been advocating for years with all major parties for a change to GST thresholds and are \u201cencouraged\u201d that the Conservative policy addresses what has been a major contributor to affordability challenges when buying a home.<\/p>\n
\u201cThe GST thresholds haven\u2019t changed since the introduction of the GST in 1991. Since then, house prices have more than doubled,\u201d said CHBA CEO Kevin Lee. \u201cRemoving the GST on new homes will help improve affordability and enable more supply.\u201d<\/p>\n
To pay for this policy, Poilievre proposes removing some current federal infrastructure spending which is conditional on municipalities improving their policies and processes.<\/p>\n
\u201cRemoving the GST for new homes purchased for under $1 million may be the most significant housing policy commitment made in the past two decades,\u201d said Mike Collins-Williams, CEO, West End Home Builders\u2019 Association. \u201cRemoving the GST shows leadership to cut crippling levels of taxation on new housing, puts money directly back into the pockets of Canadians while combatting the housing crisis.\u201d<\/p>\n
Taxes on new homes in the Greater Toronto Area are among the highest in North America, contributing to unaffordability for many, particularly first-time homebuyers.<\/p>\n
Currently, the federal government offers a 36 per cent rebate on the GST paid for homes valued at or below $350,000, up to a maximum of $6,300.<\/p>\n
If elected in the next federal election, Conservatives will remove the entire 5% GST would be eliminated for homes sold for under $1 million, potentially saving buyers up to $50,000.<\/p>\n
Poilievre estimates the tax cut could lead to the construction of an additional 30,000 homes each year, generating more income for construction workers and businesses and an estimated $2.1 billion in revenue for the government.<\/p>\n
High taxes are a major factor contributing to the housing supply and affordability crisis. Reducing sales taxes would significantly lower the cost of new housing, enabling builders to construct more affordable homes.<\/p>\n
A report from the Canadian Centre for Economic Analysis last year showed the tax burden on new home construction is double that of other sectors, with taxes on new home purchases rising from approximately 24 per cent in 2012 to 31 per cent today.<\/p>\n
\u201cThese taxes ultimately fall on new homebuyers,\u201d Lyall said. \u201cThis tax burden is deterring many potential buyers and driving people away from our cities. The Conservatives\u2019 plan is forward-thinking and could help restore balance to the housing market.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Ontario Construction News staff writer Eliminating federal sales tax on new homes priced under $1 million is a step in the right direction that will reduce costs and stimulate demand for new homes, according to Ontario builders. The plan to cut the tax was announced by federal Conservative leader Pierre Poilievre last week. \u201cWe […]<\/p>\n","protected":false},"author":4,"featured_media":10058,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"tdm_status":"","tdm_grid_status":"","footnotes":""},"categories":[28,29],"tags":[],"class_list":{"0":"post-10057","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-contracting","8":"category-current-news"},"acf":[],"yoast_head":"\n