Conservative Leader Pierre Poilievre has pledged to remove the federal GST on new homes sold for under $1 million if his party wins the next election. The announcement, made in a campaign-style video on Monday, expands on his earlier promise to cut GST on new rental housing projects with below-market prices.
Poilievre stated that eliminating the GST on new homes is part of his broader plan to reduce housing costs and spur construction. He claimed the move would save homebuyers $40,000 on an $800,000 home and lead to the construction of 30,000 additional homes annually in Canada.
Addressing Housing Affordability
“The GST was never meant to apply to basic necessities like food and housing,” Poilievre emphasized. He assured that competition among developers would ensure the savings are passed on to buyers, rather than being absorbed as profits.
Kevin Lee, CEO of the Canadian Home Builders’ Association, expressed confidence in the plan, noting that builders would be compelled to pass on the savings due to affordability challenges in the market. “If people can’t afford to buy, builders can’t build,” Lee said.
The Canadian Real Estate Association (CREA) also welcomed the pledge, describing it as a positive step towards making homeownership more attainable for Canadians.
Eliminating Housing Funds to Offset GST Cut
To finance the plan, Poilievre proposed scrapping the Housing Accelerator Fund and the Housing Infrastructure Fund—programs established to facilitate municipal housing developments and infrastructure projects. He criticized these funds as inefficient bureaucracies that have failed to deliver results.
The Housing Accelerator Fund, first announced in 2021, allocates $4 billion to increase housing starts by easing municipal planning and development processes. In April, an additional $400 million was injected into the fund.
Poilievre’s approach drew criticism from NDP Leader Jagmeet Singh, who cautioned that the GST cut could primarily benefit investors buying multiple properties, rather than first-time homebuyers. He argued that programs like the Housing Accelerator Fund are necessary to get new homes built.
Federal Housing Minister Sean Fraser echoed these concerns, warning that the GST cuts should be carefully targeted to prevent enriching developers and corporate investors at the expense of low and middle-income Canadians.
Industry and Expert Reactions
While Poilievre’s plan to eliminate GST on new homes has been broadly supported by industry groups like CREA, Kevin Lee urged caution on the potential cancellation of the two housing funds. He stressed the need for infrastructure funding to support municipal planning and development projects, urging Conservatives to propose a replacement if the funds are removed.
Janice Myers, CREA CEO, highlighted the importance of additional policies to improve housing affordability and accessibility, beyond eliminating the GST.
Background on Current GST Rebate
Under existing rules, buyers of new homes can receive a rebate of up to 36% of the GST, capped at $6,300 for homes priced up to $350,000. The rebate gradually reduces for homes priced between $350,000 and $449,999, phasing out entirely at $450,000.
Poilievre’s announcement aims to provide a more comprehensive tax relief measure to address Canada’s ongoing housing affordability crisis. The Conservative Leader framed the policy as part of his “common-sense approach” to reduce bureaucracy and empower homebuyers.