Conservative Leader Pierre Poilievre announced that he would eliminate the federal sales tax on new homes worth less than $1 million if elected.
On Monday, Poilievre said that removing the federal sales tax, commonly known as the GST, on these homes would spur the building of an additional 30,000 homes annually. He added that he would encourage provinces to remove PST from new homes, saving taxpayers an additional tens of thousands of dollars.
“Imagine this: You wake up one morning and open your phone to look up the new home listings, only to discover something shocking. Everything has doubled,” said Poilievre in his video announcing the tax cut. “Yet this isn’t fiction. It’s reality.”
The Conservative leader said that when Prime Minister Justin Trudeau took office nine years ago, Canadians could pay off a mortgage in 25 years. However, now it takes 25 years just to save for a down payment.
Housing affordability in Canada reached an all-time low in April. In Vancouver, an average household would have to spend 106.3% of its income to cover homeownership costs.
Taxes account for a very sizeable portion of the cost of new homes.
Poilievre said that taxes alone account for about 30% of the cost of a new home in Ontario and British Columbia, the country’s two most expensive provinces for housing. About 39% of this cost goes to the federal government.
“That means that politicians and bureaucrats are making more money on the sale of a new home than the carpenters and electricians who actually build the homes,” he said. “No wonder housing is so expensive in this country.”
On top of the GST, there are additional levies on the taxes taken by provincial and municipal governments that are passed on to the feds.
Poilievre said that the tax cut would save homebuyers $40,000 on the purchase of an $800,000 home, equivalent to $2,200 annually in mortgage payments.
“For a typical home in Ontario and British Columbia, this will result in savings of $43,225 and $48,160 respectively,” said a spokesperson for Poilievre.
He plans to fund the tax cut by cutting “failed Liberal housing policies” like the Housing Accelerator Fund, which he said the Liberals have admitted doesn’t actually build homes.
Poilievre said that the tax cut would save $8 billion over several years.
Canada’s debt officially doubled under Trudeau on Aug. 30, 2024. During his tenure, the average cost of a home has risen around 61%, with the peak price of a home seeing an 84% increase.
The Canadian Taxpayers Federation applauded the announcement.
“Too often, the federal government ramps up spending on housing programs that don’t work and waste taxpayers’ money,” said the Federal Director of the CTF, Franco Terrazzano. “The best way for the federal government to make homes more affordable is to cut taxes for building homes.”
Looking South, Poilievre said at a Monday press conference that homes in the United States are between 25% and 45% cheaper than in Canada, which he attributed primarily to fewer government costs. He added that building permits in the United States are issued automatically and very quickly.
Housing starts in Canada have failed to keep up with increasing demand and costs.
One of Trudeau’s recent housing policies was what Poilievre was already proposing. Time will tell whether Trudeau takes influence from this housing announcement as well.
The majority of Canadians now believe that homeownership is only for the rich.