BILD: Tax cuts on new homes would really help
Article content
Reviews and recommendations are unbiased and products are independently selected. Postmedia may earn an affiliate commission from purchases made through links on this page.
There is an urgent need to solve the “cost to build crisis” in the GTA this election
As economic uncertainty looms, with the ongoing U.S. tariff threats and geopolitical turmoil, the stakes in this federal election are high for Canada’s economic and societal future.
Recommended Videos
tap here to see other videos from our team.
BILD: Tax cuts on new homes would really help Back to video
tap here to see other videos from our team.
To put it plainly, now more than ever is the time for governments to invest in housing. Building homes in the GTA builds our country’s economy, protects Canadian jobs and supports domestic industries from coast to coast.
The homebuilding sector directly employs 100 per cent Canadian workers, and over 90 per cent of the materials used in construction are sourced from within the country.
Unfortunately due to a cost to build crisis, it is impossible to bring housing to market at a price that it can and will be absorbed. The industry is slowing down precisely when we need it to be speeding up. Sales are drying up, starts are falling fast.
Now, more than ever, is the time for governments to act to stimulate the building and tackle housing affordability. This can be achieved by eliminating the HST on new homes and reducing development charges (DCs) – steps that could reduce the cost of an average GTA home by up to $200,000.
It’s a win-win, houses for a region that desperately needs more homes, and supporting the economy against the turmoil and threats from south of the border.
At the onset of this federal election campaign, we have seen two welcome, but different announcements on exempting new homes from the federal portion of the HST. The conservative pledge to remove the HST from the sale of all new homes under $1.3 million and the Prime Minister’s announcement to remove the HST on the sale of new homes under $1 million for first-time buyers.
These are positive steps and signal coming tax reductions on new homes. However, to be successful in addressing affordability these policies must apply to the largest number of buyers, have price thresholds that are reflective of the GTA market reality and be matched by the provincial government.
The federal measures are required because as I discussed in my previous column, federal HST revenue on new homes has increased significantly alongside home prices.
When the GST (now HST) was introduced in 1991 the average Ontario home cost $276,000, and the federal government collected $8,800 in sales tax.
By 2023, with the average home priced at $1,023 million, the federal government collects $47,000 in HST— a 435 per cent increase.
Why is it important for the provincial government to match any federal policy moves you might ask? Similar to the federal government, provincial HST revenues on new homes have equally ballooned with GTA home prices.
When the HST was first introduced on new homes in Ontario in 2010, the average price of a new single-family home in the GTA was $519,000 (compared to $1.63 million in 2024), which meant the provincial government collected $13,500 in sales tax revenue.
In the GTA today, even after the available HST rebate of $24,000 that the province offers, the provincial portion of the HST still adds approximately $93,000 to the cost of a new single-family home.
Development charges are a municipal responsibility enabled under Ontario’s Development Charges Act. These charges are applied to new homes to offset the cost of housing supportive infrastructure and services.
GTA fees are the highest in North America and have risen by over 327 per cent in the past 15 years. On average, they add $125,000 to the cost of a single-family home and $71,000 to a two-bedroom condo.
Vaughan and Mississauga have recently demonstrated tremendous leadership by voluntarily reducing DCs to address the cost to build challenge and spur construction, but other GTA municipalities must do the same. Federal leaders can support these types of efforts and exert moral suasion on other municipalities to do the same.
As residents of the GTA prepare to vote on April 28, it is time for governments to take action to reduce the cost to build challenges in the GTA.
By taking action, such as eliminating the HST on new homes and working with municipalities to reduce other fees and charges, we can help restore affordability, build housing that is required, protect Canadian jobs and help insulate our economy. To find out more, visit www.bildgta.ca/homesforcanada.
Dave Wilkes is President and CEO of the Building Industry and Land Development Association (BILD), the voice of the home building, land development and professional renovation industry in the GTA. For the latest industry news and new home data, visit www.bildgta.ca.
Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.