Latest news with #DesjardinsEconomics
CBC
11-06-2025
- Business
- CBC
GST rebate on new homes would save typical first-time buyer $27K: Budget officer
Social Sharing The parliamentary budget officer says an eligible first-time homebuyer would save an average of $26,832 in sales tax on the price of a newly built home under Ottawa's latest housing proposal. In an analysis released Wednesday, the federal government's fiscal watchdog predicts that 71,711 new builds would qualify for GST relief over the lifetime of the program. The proposal would see the federal portion of the sales tax eliminated on a new home worth up to $1 million if it's bought by a qualifying first-time homebuyer. The GST rebate would be phased down as the price of the home approaches $1.5 million. Homes bought from May 27 through to 2031 can qualify for the rebate, as long as construction starts before 2031 and finishes by 2036. Canadians who have owned a home already are not eligible for the GST relief — with some exceptions. Neither are investors. The PBO forecasts the program will cost $1.9 billion over six years, while the federal government has pegged the "tax savings" for Canadians at $3.9 billion over five years. The PBO's latest estimate is about $100 million lower than the figure it cited during the spring federal election, when the GST break was proposed. It attributes that gap to a later implementation date and a different definition used for first-time homebuyers. A Desjardins Economics analysis of the proposal released Monday offered one explanation for the discrepancy between the PBO's cost estimate and the government's figure: Ottawa might think its program will be more popular than the PBO does. A higher cost estimate suggests more first-time homebuyers purchasing qualifying new builds, in other words. Economic impact of tax cut not part of analysis The GST rebate, which is not yet law, was included in the Liberals' spring election platform as a way to help Canadians break into the housing market. A home priced at $1 million would receive the maximum rebate of $50,000. The Desjardins report by economist Kari Norman said that if the program proves popular with first-time buyers, it could spur additional housing construction to meet higher demand. The PBO said it does not include possible behavioural responses to the program in its analysis. Norman noted in her report that it's also possible increased demand from homebuyers will push up home prices in the near term. She estimated that 85 per cent of new homes built in Canada over the program timeframe will be eligible for the full GST break of up to $50,000. In cases where the GST portion of a new home sale is rolled into the mortgage principal, the typical owner could expect to save $240 per month on mortgage payments, she said. The savings are more direct when a developer charges the GST upfront. The measure is packaged in legislation that also includes the Liberals' promised income tax cut, which is set to take effect July 1 after it was adopted through a ways and means motion last week.
National Post
11-06-2025
- Business
- National Post
Ottawa's GST rebate on new homes would save typical first-time buyer $27K: PBO
The parliamentary budget officer says an eligible first-time homebuyer would save an average of $26,832 in sales tax on the price of a newly built home under Ottawa's latest housing proposal. Article content In a new analysis released Wednesday, the federal government's fiscal watchdog predicts that 71,711 new builds would qualify for GST relief over the lifetime of the program. Article content Article content Article content The proposal would see the federal portion of the sales tax eliminated on a new home worth up to $1 million if it's bought by a qualifying first-time homebuyer. Article content Article content The PBO forecasts the program will cost $1.9 billion over six years, while the federal government has pegged the 'tax savings' for Canadians at $3.9 billion over five years. Article content The PBO's latest cost estimate is about $100 million lower than the figure it cited during the spring federal election, when the GST break was proposed. It attributes that gap to a later implementation date and a different definition used for first-time homebuyers. Article content Article content A Desjardins Economics analysis of the proposal released Monday offered one explanation for the discrepancy between the PBO's cost estimate and the government's figure: Ottawa might think its program will be more popular than the PBO does. Article content Article content A higher cost estimate suggests more first-time homebuyers purchasing qualifying new builds, in other words. Article content The GST rebate, which is not yet law, was included in the Liberals' spring election platform as a way to help Canadians break into the housing market. Article content A home priced at $1 million would receive the maximum rebate of $50,000. Homes priced below that amount would still get the full rebate – but since the sales tax is a smaller share of the final cost, the rebate would be lower as well. Article content The rebate also would be lower than $50,000 for homes sold above $1 million because the rebate gradually ramps down until it zeroes out at a purchase price of $1.5 million.
Yahoo
11-06-2025
- Business
- Yahoo
New home GST rebate will cost $1.9B, PBO report says
OTTAWA — Giving new homeowners a break will cost the government billions, a new report from Canada's fiscal watchdog says. The report released Wednesday by the office of Parliamentary Budget Officer Yves Giroux says the key election pledge from Prime Minister Mark Carney offering new homebuyers full GST rebates on new homes valued under $1 million, and partial rebates for homes up to $1.5 million, will cost $1.9 billion over six years. 'Across its term, we project that the proposed rebate will provide rebates for about 71,711 purchases of new homes by first-time homebuyers purchasing homes valued under $1.5 million,' the report stated. 'This represents a subsidy averaging $26,832 for 4.8% of housing completions over this period.' Carney's election promise, adapted from proposed policies touted by the Conservatives during this year's federal election campaign, is part of the government's plan to temper Canada's ongoing cost-of-living and affordability crisis. GST relief on new homes could save 1st-time buyers up to $240 on mortgages: Report Liberals vow to cut GST for first-time homebuyers purchasing homes for $1M or less Bill C-4, the legislation intended to enact this policy, passed first reading in the House of Commons last Thursday. Based on current trends and available home sales data, the report estimates the legislation will provide rebates for a little under 72,000 new homes valued under $1.5 million, representing an average subsidy of $26,832. Over the program's six years, the report estimates about 1.5 million homes and apartments will be completed, of which 836,000 will end up in the ownership, condo and co-op markets. Of those, the report estimates 407,948 will be purchased as primary residences, 81,146 of which will be eligible first-time homebuyers, and 77,253 will be under the $1.5-million value threshold. A report issued last week by Desjardins Economics suggested the rebate could save new homebuyers up to $240 on their monthly mortgage payments on an all-in, tax-included price of a $1-million home, with a slightly smaller down payment. bpassifiume@ X: @bryanpassifiume
Global News
10-06-2025
- Business
- Global News
GST relief could save 1st-time home buyers $240 on mortgages: report
The Liberal plan to give first-time homebuyers a tax break on a newly built home could have substantial impacts on housing affordability — with a few caveats — a new analysis finds. The Liberal government introduced legislation on June 5 to eliminate the GST portion from new home sales of up to $1 million for first-time buyers, which works out to as much as $50,000 off the cost of a new build or a substantially renovated unit. For homes sold above $1 million, the GST relief is phased out as the price tag nears $1.5 million. Desjardins Economics said in a report released Monday that first-time Canadian homebuyers could save up to $240 on their monthly mortgage payments if they were to buy a new home with an all-in, tax-included price of $1 million. The required down payment would also be somewhat smaller. Story continues below advertisement Some developers charge the sales tax upfront, so it's not rolled into the mortgage principal at the time of purchase. 'For these homes, eliminating the GST will help prospective buyers reduce upfront closing costs, helping them get their foot in the door sooner,' said the report, authored by Desjardins economist Kari Norman. 0:38 Feds eliminating GST on new, 'substantially renovated' homes under $1M: Carney She argued the impact on housing affordability will be 'particularly strong' for buyers in Canada's more expensive markets, like Toronto and Vancouver, where homes are routinely priced above the $1-million mark. Get weekly money news Get expert insights, Q&A on markets, housing, inflation, and personal finance information delivered to you every Saturday. Sign up for weekly money newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy The new policy takes a big step beyond the existing New Housing Rebate, which is open to more than just first-time buyers but has long been capped at homes priced up to $450,000. Norman estimates that nearly 85 per cent of new builds in Canada would quality for up to $50,000 GST relief in the new proposal. Story continues below advertisement Roughly 92 per cent of new builds in Toronto are expected to qualify for full or partial tax relief for homes priced up to $1.5 million. Only 75 per cent of new units in Vancouver would qualify, however, as many top out of the qualifying price range. Desjardins recommends that the new policy index the price of qualifying homes to inflation to avoid future erosions in affordability. The federal government predicts the GST rebate will cost about $3.9 billion over five years, while the parliamentary budget officer estimates the price tag is closer to $2 billion over the same time frame. Desjardins said the discrepancy between the figures could indicate the federal government anticipates more new buyers taking advantage of the rebate, and a bigger boom in homebuying and construction as a result. It's possible that increased demand spurred by the policy also leads to a surge in new building in Canada, the report said. 0:59 Robertson defends position on housing prices in question period The rebate also comes at a time when the Canadian construction industry faces serious obstacles to getting shovels in the ground: high financing and construction costs, regulatory delays, an aging workforce and uncertainty among buyers and builders tied to Canada's trade war with the United States. Story continues below advertisement The report also warns that some developers, foreseeing increased buying power, could raise their own costs for materials and labour in response to the policy, which would undermine any gains in affordability. Higher demand for housing tied to the GST break could, in the near-term, push up home prices if not coupled with other efforts to boost supply and the pace of construction, the report said. This might be the ideal time to introduce a policy that stokes demand for new builds, however, as Desjardins noted a particularly soft condo market in cities such as Toronto could benefit from an increase in buyer appetite. Parliament has yet to pass the legislation, which would apply to homes bought between May 27 through to 2031. Construction on qualifying homes would need to start before 2031 and finish by 2036. The measure, one of a suite of proposals included in the Liberal platform during the spring federal election, is packaged in the same legislation as the promised income tax cut, which is set to take effect July 1.
Winnipeg Free Press
09-06-2025
- Business
- Winnipeg Free Press
GST relief on new homes could save 1st-time buyers up to $240 on mortgages: report
OTTAWA – A new analysis says first-time Canadian homebuyers could save up to $240 on their monthly mortgage payments through the federal government's proposal to waive the sales tax on new builds. Desjardins Economics says in a new report that the impact on housing affordability will be 'particularly strong' for buyers in Canada's more expensive markets, like Toronto and Vancouver. The Liberal government has tabled legislation to eliminate the GST portion from new home sales of up to $1 million for first-time buyers, which works out to as much as $50,000 off the cost of a new build or substantially renovated unit. For homes sold above $1 million, the GST relief is phased out as the price tag nears $1.5 million. But Desjardins also cautions that the policy could drive up demand for housing, which in the near-term could push up home prices if not coupled with other efforts to boost supply. Monday Mornings The latest local business news and a lookahead to the coming week. Parliament has yet to pass the legislation, which the Liberals introduced alongside the government's pledge to cut income taxes starting July 1. This report by The Canadian Press was first published June 9, 2025.
