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Calgary Herald
10-06-2025
- Business
- Calgary Herald
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. Article content 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. Article content Article content Article content The report also warns that the rebate could distort the market because homebuilders might anticipate homebuyers' increased purchasing power and simply raise sticker prices on new homes. Another possible problem is that the rebate might encourage first-time buyers to rush purchases in anticipation of rising prices, Desjardins says, leading to a short-term sales spike that would likely be followed by a slump. Article content Article content With the federal Parliamentary Budget Officer set to release an assessment Wednesday on the fiscal costs of the GST rebate on first-time homebuyers, Desjardins voiced concern that the policy will also mean that the benefits to buyers may be partly offset if the increased demand for homes leads to an increase in the costs of labour and building supplies. Article content Instead, Desjardins suggests that Ottawa mitigate the risk of demand outpacing supply by bundling the GST rebate with policies that would accelerate the pace of home building. The report says those other policies include streamlining permitting processes, investing in innovative practices, addressing skilled labour shortages and improving zoning flexibility. Article content Paul Smetanin, the president of the Canadian Centre for Economic Analysis, said he agrees with Desjardins' concern about the GST rebate because the policy will increase demand and prices and give developers the chance to simply increase profits.
Calgary Herald
04-06-2025
- Business
- Calgary Herald
Extend GST housing rebate to seniors who want to downsize, report recommends
OTTAWA — The federal government's GST rebate on new homes should be extended to seniors who want to downsize, a new report says, to help boost the supply and cut the price of family homes. Article content The report, released Tuesday by the Ottawa-based Missing Middle Initiative, says that Canada's housing crisis is being partly fuelled by market bottlenecks preventing seniors from downsizing. Article content Article content Article content The document says that Canada's housing supply problems include a lack of smaller homes with access to seniors' preferred facilities and services, which creates disincentives for empty nesters to downsize. That leaves many seniors with homes that are larger than they need, while further restricting the supply of family homes and raising prices. Article content Article content This under-appreciated piece of Canada's housing crisis is exacerbated by high transaction costs, such as the GST and land-transfer taxes, that create further disincentives for seniors to downsize, the report adds. Article content Eliminating these transaction costs would help spur more downsizing, the report says. 'Not only would this help increase the supply of seniors' friendly housing (but) would also free up larger, child-friendly homes for the next generation of families.' Article content Paul Smetanin, the president of the Canadian Centre for Economic Analysis, said he agrees with the report's conclusions and that Canada's current housing problems were completely predictable and the product of a series of government policy and municipal planning failures. Smetanin said his company estimates that there are 4.4 million empty rooms in Ontario alone, in part because of the empty nesters who can't downsize. Article content Article content Those empty rooms are the equivalent to what would normally take more than 20 years to build, he said. 'It really burns my chops.' Article content Article content Canada's housing crisis has been a high-profile and far-reaching problem in recent years. As the population has increased, particularly in urban areas, demand for both home purchases and rentals has soared, leaving many Canadians under-housed or even homeless. Article content The federal government's response in recent months has been to try to make homes more affordable while increasing supply, including greater reliance on pre-fabricated homes. Article content The Missing Middle Initiative report also found that homeownership rates are dropping for those under the age of 40 as they are being priced out of many markets. Many young families are also facing a 'second-time homebuyers' barrier in that they own a small home, often a one-bedroom residence, but they have been priced out of transitioning to something that meets their growing family's needs.
National Post
04-06-2025
- Business
- National Post
Extend GST housing rebate to seniors who want to downsize, report recommends
OTTAWA — The federal government's GST rebate on new homes should be extended to seniors who want to downsize, a new report says, to help boost the supply and cut the price of family homes. Article content The report, released Tuesday by the Ottawa-based Missing Middle Initiative, says that Canada's housing crisis is being partly fuelled by market bottlenecks preventing seniors from downsizing. Article content Article content Article content The document says that Canada's housing supply problems include a lack of smaller homes with access to seniors' preferred facilities and services, which creates disincentives for empty nesters to downsize. That leaves many seniors with homes that are larger than they need, while further restricting the supply of family homes and raising prices. Article content Article content This under-appreciated piece of Canada's housing crisis is exacerbated by high transaction costs, such as the GST and land-transfer taxes, that create further disincentives for seniors to downsize, the report adds. Article content Eliminating these transaction costs would help spur more downsizing, the report says. 'Not only would this help increase the supply of seniors' friendly housing (but) would also free up larger, child-friendly homes for the next generation of families.' Article content Paul Smetanin, the president of the Canadian Centre for Economic Analysis, said he agrees with the report's conclusions and that Canada's current housing problems were completely predictable and the product of a series of government policy and municipal planning failures. Smetanin said his company estimates that there are 4.4 million empty rooms in Ontario alone, in part because of the empty nesters who can't downsize. Article content Article content Those empty rooms are the equivalent to what would normally take more than 20 years to build, he said. 'It really burns my chops.' Article content Article content Canada's housing crisis has been a high-profile and far-reaching problem in recent years. As the population has increased, particularly in urban areas, demand for both home purchases and rentals has soared, leaving many Canadians under-housed or even homeless. Article content The Missing Middle Initiative report also found that homeownership rates are dropping for those under the age of 40 as they are being priced out of many markets. Many young families are also facing a 'second-time homebuyers' barrier in that they own a small home, often a one-bedroom residence, but they have been priced out of transitioning to something that meets their growing family's needs.
Vancouver Sun
04-06-2025
- Business
- Vancouver Sun
Extend GST housing rebate to seniors who want to downsize, report recommends
OTTAWA — The federal government's GST rebate on new homes should be extended to seniors who want to downsize, a new report says, to help boost the supply and cut the price of family homes. The report, released Tuesday by the Ottawa-based Missing Middle Initiative, says that Canada's housing crisis is being partly fuelled by market bottlenecks preventing seniors from downsizing. The document says that Canada's housing supply problems include a lack of smaller homes with access to seniors' preferred facilities and services, which creates disincentives for empty nesters to downsize. That leaves many seniors with homes that are larger than they need, while further restricting the supply of family homes and raising prices. Start your day with a roundup of B.C.-focused news and opinion. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Sunrise will soon be in your inbox. Please try again Interested in more newsletters? Browse here. This under-appreciated piece of Canada's housing crisis is exacerbated by high transaction costs, such as the GST and land-transfer taxes, that create further disincentives for seniors to downsize, the report adds. Eliminating these transaction costs would help spur more downsizing, the report says. 'Not only would this help increase the supply of seniors' friendly housing (but) would also free up larger, child-friendly homes for the next generation of families.' Paul Smetanin, the president of the Canadian Centre for Economic Analysis, said he agrees with the report's conclusions and that Canada's current housing problems were completely predictable and the product of a series of government policy and municipal planning failures. Smetanin said his company estimates that there are 4.4 million empty rooms in Ontario alone, in part because of the empty nesters who can't downsize. Those empty rooms are the equivalent to what would normally take more than 20 years to build, he said. 'It really burns my chops.' Canada's housing crisis has been a high-profile and far-reaching problem in recent years. As the population has increased, particularly in urban areas, demand for both home purchases and rentals has soared, leaving many Canadians under-housed or even homeless. The federal government's response in recent months has been to try to make homes more affordable while increasing supply, including greater reliance on pre-fabricated homes. In March, the federal government announced that it would eliminate the GST for first-time homebuyers who purchased homes for $1 million or less, although it is not yet clear if that will bring down home prices . The Missing Middle Initiative report also found that homeownership rates are dropping for those under the age of 40 as they are being priced out of many markets. Many young families are also facing a 'second-time homebuyers' barrier in that they own a small home, often a one-bedroom residence, but they have been priced out of transitioning to something that meets their growing family's needs. The Missing Middle Initiative, launched late last year and housed out of the University of Ottawa, was designed to help support Canada's urban middle class and analyze the barriers preventing young Canadians and new families from entering the middle class. National Post Get more deep-dive National Post political coverage and analysis in your inbox with the Political Hack newsletter, where Ottawa bureau chief Stuart Thomson and political analyst Tasha Kheiriddin get at what's really going on behind the scenes on Parliament Hill every Wednesday and Friday, exclusively for subscribers. Sign up here . Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark and sign up for our daily newsletter, Posted, here .
