Canada Eliminates GST on New Homes for First-Time Buyers in Bid to Boost Housing Market — The Residential Construction Council of Ontario

Event summary

Canada's Bill C-4 eliminates the 5% federal GST for first-time buyers on new homes priced at or under $1 million, and reduces it for homes between $1 and $1.5 million.
Ontario will reduce its 8% provincial portion of the HST for first-time buyers of new homes, resulting in a combined total provincial and federal rebate of 13%.
RESCON president Richard Lyall highlights that taxes, fees, and government levies now account for roughly 36% of the cost of a newly built home in Ontario.
The decline in housing starts has already translated into more than 35,000 fewer person-years of employment compared with recent years.

The big picture

The passage of Bill C-4 is a significant move to address housing affordability and stimulate new home construction amid severe economic headwinds. Ontario's housing sector has been facing declining housing starts, falling new home sales, and mounting job losses, making this legislation a critical step in restoring market confidence. The combined federal and provincial tax relief measures aim to reduce the financial burden on first-time buyers and encourage builders to resume construction projects.

What we're watching

Market Stimulus: Whether the GST and HST reductions will effectively revive the new home market and stimulate residential construction.
Government Action: The pace at which governments will continue to examine and reduce the overall tax burden on new housing.
Industry Recovery: How the legislation will impact job losses and project shelving in the housing sector.