Critics, including builders and real estate analysts, are challenging the federal government's proposed GST rebate for first-time homebuyers of new construction homes. They argue that the price caps are too low for expensive markets like Vancouver and Toronto, making the measure ineffective in significantly boosting affordability or home sales.
Critics say proposed GST rebate won’t help most first-time homebuyers
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TL;DR: Key points with love ❤️Critics, including builders and real estate analysts, are challenging the federal government's proposed GST rebate for first-time homebuyers of new construction homes. They argue that the price caps are too low for expensive markets like Vancouver and Toronto, making the measure ineffective in significantly boosting affordability or home sales.
Trending- 1 1989: Original GST briefings proposed a $300,000 rebate cap for new homes.
- 2 2002-2003: First-time and end-users constituted 40-70% of preconstruction sales.
- 3 Past 15 years: Investors gained the majority share of Ontario new construction homes.
- 4 April (current year): Preconstruction home sales in the GTA were 72% lower than in 2024 and 89% lower than the 10-year average.
- 5 May 27 (current year): The Department of Finance announced changes to the GST rebate for new homes.
- 6 Current: Ongoing debate and criticism regarding the effectiveness of the proposed GST rebate.
- The proposed rebate may have a limited impact on housing affordability and new home sales in major Canadian markets.
- Continued high housing prices, especially in Toronto and Vancouver.
- Calls for more comprehensive policy changes, such as complete GST removal on new homes.
What: A debate and criticism regarding the federal government's proposed GST rebate for first-time homebuyers of new construction homes, with critics arguing its limited effectiveness in addressing housing affordability.
When: May 27 (Department of Finance announcement); April (preconstruction home sales data); 2024 (sales data comparison); 10-year average; 15 years ago (investor share); 20 years ago (first-time buyer share); 2002-2003 (precon sales data); 1989 (original GST briefings).
Where: Canada (federal policy), Lower Mainland (Vancouver area), Greater Toronto Area (GTA), Ontario, British Columbia (B.C.).
Why: Critics believe the proposed GST rebate's price caps ($1 million for full, $1.5 million for partial) are too restrictive for high-cost markets, thus excluding many first-time buyers and failing to significantly impact housing affordability or stimulate the home-building industry.
How: The Department of Finance announced the rebate, but industry associations (like BILD) and real estate analysts are publicly critiquing its limitations and advocating for a broader removal of GST on all new homes to genuinely improve affordability.