GST cut for new homebuyers could mean price hikes, bank warns
OTTAWA — The federal government's plan to eliminate the GST on first-time homebuyers' purchases of most new homes may actually lead to higher prices, a new report says.
The report, by Desjardins Economics' Kari Norman, found that the federal policy to eliminate or reduce the GST on newly built homes priced up to $1.5 million for first-time homebuyers may cut upfront costs. But without a corresponding increase in the supply of homes to quell the housing crisis, the bank economists say, the federal policy may just boost demand and the home prices that the government intends to help suppress.
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