April 1, 2025
| Highlights: GST Exemptions on New Homes –Liberals promise to waive GST for first-time buyers on homes up to $1M, while Conservatives extend this promise to all buyers for homes up to $1.3M. Market Uncertainties from GST Cuts – While they could lower upfront costs for buyers and encourage construction, experts warn the GST cuts may boost investor speculation and have limited effect in high-cost cities. Funding and Trade-Offs – The Conservatives plan to eliminate the Housing Accelerator Fund and Housing Infrastructure Fund to save $8 billion and offset the cost of their tax cut, while the Liberals aim to increase housing supply through federal land development and waive land transfer tax involved in buying a home. Large-scale public housing investment – The NDPs and Greens focus on large-scale public housing investments, stricter market regulations, and rent controls. Informed Voting Matters – Voters must carefully consider whether they prioritize homeownership incentives, rental protections, or public housing expansion when making their decision in the upcoming election. |
For many Canadians, the dream of homeownership is slipping further out of reach, making housing affordability one of the most pressing issues in the upcoming election. With soaring inflation costs and crazy shifts in the real estate market, voters must closely examine how each party intends to tackle the housing crisis in Canada. With each major political party proposing different solutions to address the crisis—ranging from tax cuts and development incentives to large-scale public housing projects—voters must carefully evaluate these policies to determine which approach best aligns with their needs and broader market realities. Making an informed decision at the polls could help shape Canada’s housing landscape for many years to come. This article will give you a brief overview of the promises that political parties are putting forth with regards to housing policies for Canada.
GST is paid for new homes bought directly from the builder. GST also applies to new homes bought from an original buyer who is selling the property on assignment without occupying it themselves. If a property has undergone major renovations, with 90% or more of its interior replaced, GST would also be applicable. In addition to applicable provincial sales tax, these taxes must be paid upfront as part of the closing costs, making them a crucial expense for homebuyers to consider. Both the Liberals and Conservatives have proposed different schemes to waive GST on newly built homes in their party platforms.
The Liberals’ plan would remove the GST for first-time home buyers on homes under $1 million. Carney says this exemption is designed to help Canadians entering the housing market for the first time, making homeownership a more attainable goal for those struggling to enter the market. This exemption will lower upfront costs involved in house closings. It will also create an increase in the construction of new homes. This policy is expected to save homebuyers up to $50,000 on the purchase of a new home.
The Conservatives’ scheme would remove the GST for all buyers on homes up to $1.3 million. This broadens the scope of the policy already suggested by the Liberals to include first-time homebuyers, repeat homebuyers, and investors. Poilievre says that when he was housing minister in 2015, 39% of the median household income would be dedicated to cover the costs of homeownership. This number has now risen to 60% of the median household income. To pay for the tax cut, the Conservatives plan to eliminate the Liberal government’s Housing Accelerator Fund and Housing Infrastructure Fund, which they claim will save $8 billion. This policy is expected to save homebuyers up to $65,000 on the purchase of a new home and up to $3000 per year on mortgage payments. It is also expected to increase the construction of new homes built to 36,000 extra homes per year.
While both these policies aim to meaningfully improve affordability, the benefits might be unevenly distributed. Experts have examined these policies and addressed some gaps to be considered.
The Liberals’ $3.6 billion housing plan combines incentives for developers with rent control measures. Their plan involves cutting development charges on specific projects and reimbursing municipalities for the lost revenue. They aim to waive the provincial land transfer tax for first-time buyers, seniors, and non-profits. The Liberal party housing promises involve legalizing fourplexes on residential-zoned land to increase housing supply.
The Liberals will focus on implementing rent control in new buildings, while still allowing rent resets between tenants. Through their plan, short-term, interest-free loans will be provided to vulnerable tenants facing eviction.
The Progressive Conservatives have pledged to spend $3 billion over the next three years to fund affordable housing, emergency shelter support, and anti-homelessness initiatives. They have also committed $2 billion towards building homes and water infrastructure to support housing expansion efforts.
A unique aspect of the Conservative housing platform is the proposed use of artificial intelligence (AI) to speed up building permit approvals, aiming to cut bureaucratic inefficiencies and accelerate construction timelines in Canada.
The NDP’s housing policy for the 2025 election is driven towards ambitious public investment. They propose a $2.5 billion per year investment to build 1.5 million homes over a decade, including 300,000 permanently affordable homes. They aim to use public land, grants, and take over affordable housing schemes from municipalities.
Their strategy includes establishing 60,000 supportive housing units for those experiencing homelessness. Their policies aim to legalize fourplexes in residential areas and building taller buildings near transit hubs.
They are also focusing on implementing rent control in newer buildings by tying rent increases to the unit rather than the tenant to prevent sudden price hikes. Short-term rentals will be limited to homeowners’ primary residences.
The Greens are planning large-scale investment in housing, promising to build two million urban homes over 10 years and allowing single-family homes to be divided into condos. Their plan involves legalizing fourplexes and four-storey buildings everywhere, with sixplexes in larger cities and 11-storey buildings along transit routes.
As part of their affordable housing initiatives for Canada, development charges for small urban homes will be eliminated and municipalities will be reimbursed with these funds. The Greens’ community housing and shelter plan involves building 250,000 non-profit and co-op rental homes leveraging public land.
Under their initiatives, homeowners will be provided $25,000 to create affordable rental units. A vacant unit tax and a ban on short-term rentals will be implemented in areas with low vacancy rates.
Housing affordability remains a prominent issue for Canadians, with each party offering vastly different solutions that could shape the market for years to come. Some emphasize public investment and tenant protections, while others prioritize development incentives and cost reductions for homebuyers. As the Canadian election approaches, it is crucial for voters to critically examine these housing policies, consider their potential impacts, and make an informed decision based on which approach aligns best with their needs and priorities. By comparing party platforms on housing, voters can make an informed vote. An informed vote isn’t just about choosing a party—it’s about shaping the future of housing in Canada.
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