Sat. Nov 2nd, 2024

Pierre Poilievre Proposes GST Cut on New Homes Under $1 Million

Conservative Leader Pierre Poilievre announced a key element of his housing plan today, pledging to eliminate the federal Goods and Services Tax (GST) on new homes priced under $1 million if elected.

The plan would effectively reduce the price of a typical new home by up to five percent, potentially saving thousands of dollars for prospective homeowners. For instance, Poilievre stated that removing GST on a $500,000 home in Quebec would save buyers around $25,000, resulting in estimated savings of $1,300 per year in mortgage payments.

Today, housing costs have surged 40 percent faster than family incomes with average mortgage payments doubling since 2015. Poilievre noted that housing inflation in Canada is now among the highest in the G7, and cities like Vancouver and Toronto rank among the world’s most expensive housing markets relative to income.

Poilievre underscored the impact of federal, provincial, and municipal bureaucratic delays and taxes on housing prices. He pointed to regulatory obstacles hampering construction rates, leading to a housing supply that cannot meet demand. The Conservative leader also criticized the federal government for imposing extensive taxes, claiming that roughly 30 percent of the cost of a new home goes toward direct taxes, which include the GST, and various other fees imposed at different levels of government.

“The number one cost of a home today is not the materials, not the labor — it’s government,” Poilievre said, describing his proposal as a step toward reducing these financial barriers.

Poilievre outlined how his government, if elected, would offset the revenue loss from the GST cut by reducing bureaucratic expenses. He specifically called out the Liberal government’s $8 billion housing accelerator fund, which he claimed has not yielded significant results in terms of increasing housing supply. Instead, Poilievre accused some municipalities that received federal funding of actually reducing housing starts, such as Toronto and Montreal. Poilievre argued that his administration would reallocate funds from such underperforming programs to cover the GST cut.

Another mechanism Poilievre proposed involves leveraging the increased economic activity anticipated from new housing developments. According to his analysis, removing GST would stimulate the construction of an estimated 30,000 additional units per year. The increase in construction would yield an additional $2 billion in tax revenue through income taxes associated with the construction sector and related industries, thereby mitigating the financial impact of the GST cut on the federal budget.

Poilievre’s plan aims to reestablish Canada as a country where hard-working families can afford a comfortable home in a safe neighborhood. He referenced the traditional Canadian “social contract,” whereby hard work would provide Canadians with the resources to live comfortably, contrasting this with current conditions.

While the GST cut for new homes remains a central promise of Poilievre’s housing policy, additional details about his broader housing platform are expected as the election approaches. As affordability continues to top the list of concerns for Canadian voters, all major parties are under pressure to propose viable solutions to Canada’s housing challenges.

For now, Poilievre’s plan stands as a potential solution to make homeownership more accessible for Canadians, particularly for first-time buyers feeling the effects of record-high housing prices.

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