Published Oct 26, 2023 • 2 minute read
Adjusting the thresholds for the GST/HST new housing rebate would put tens of thousands of dollars back in the pockets of new home buyers. Photo by Shutterstock photograph
In September, the federal government announced it will remove the Goods and Services Tax (GST) on the construction of new rental housing. The same day, the Ontario government announced it will work with the federal government to remove the province’s portion of the Harmonized Sales Tax (HST) from purpose-built rentals. These commendable changes significantly improve the financial feasibility of building new homes for rent. Already we have seen announcements of projects with thousands of new units in this much-needed category. Given the significant impact that taxation can have on Canadians’ ability to attain housing, the federal government should now focus on keeping a 32-year-old promise to adjust the price thresholds for the GST/HST new housing rebate program.
Advertisement 2
This advertisement has not loaded yet, but your article continues below.
THIS CONTENT IS RESERVED FOR SUBSCRIBERS
Enjoy the latest local, national and international news.
Exclusive articles by Conrad Black, Barbara Kay, Rex Murphy and others. Plus, special edition NP Platformed and First Reading newsletters and virtual events.Unlimited online access to National Post and 15 news sites with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles including the New York Times Crossword.Support local journalism.
SUBSCRIBE FOR MORE ARTICLES
Enjoy the latest local, national and international news.
Exclusive articles by Conrad Black, Barbara Kay, Rex Murphy and others. Plus, special edition NP Platformed and First Reading newsletters and virtual eventsUnlimited online access to National Post and 15 news sites with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles including the New York Times Crossword.Support local journalism.
REGISTER FOR MORE ARTICLES
Create an account or sign in to continue with your reading experience.
Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.
Article content
The GST on new homes was introduced in 1991, replacing the previous tax regime. In order to compensate home buyers for the tax increase, the federal government introduced a rebate program that would reimburse the difference between the GST and the old tax. The government said that about 95 per cent of new homes would be eligible for the rebate. To maintain housing affordability, it made an important pledge: to review and adjust the rebate thresholds at least every two years to reflect changes in house prices. Unfortunately, no review has taken place in the 32 years that have passed and no adjustments have been undertaken.
Article content
In 2010, the HST was introduced on new homes, replacing the GST and the Provincial Sales Tax (PST), but the federal rebate program and its thresholds remain the same. The promise to Canadians to ensure that the tax does not affect housing affordability remains unfulfilled.
Since 1991, the price of an average home in the GTA has increased from $250,000 to about $1.2 million, which means the federal government’s tax revenue has increased from about $12,500 per unit to nearly $60,000 per unit. That’s tens of thousands of dollars in taxes added to the cost of a new home, in addition to all the other government fees, taxes and charges that are passed on to new home buyers as part of the purchase price. Added up, these can constitute as much as 25 per cent of the cost of a new home in the GTA, contributing to the affordability crisis.
Advertisement 3
This advertisement has not loaded yet, but your article continues below.
Article content
The federal government has demonstrated it understands the impact of taxation on housing attainability. It should follow up its laudable efforts in encouraging rental construction with an adjustment to the thresholds for the GST/HST new housing rebate. It would put tens of thousands of dollars back in the pockets of new home buyers and would honour the original intent of the rebate—to help preserve housing affordability for all Canadians.
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.
Article content
>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : National Post – https://nationalpost.com/life/homes/adjusting-hst-rebate-thresholds-would-provide-relief-for-new-home-buyers
