VAUGHAN, ONT. — The Residential Construction Council of Ontario (RESCON) is lauding a proposal put forth by the federal Conservatives to axe the federal sales tax on new homes up to $1.3 million, saying it will bring down the cost of new housing and spur sales.
“Builders have been urging both the federal and provincial governments to remove the sales taxes to reduce the cost of new housing and spur construction of residential development,” says RESCON president Richard Lyall in a statement. “This plan is bold and forward-thinking and will save buyers tens of thousands of dollars on the purchase of a new home. This is certainly good news.”
The Conservatives are saying with this latest announcement that axing the GST will save homebuyers up to $65,000 on the purchase of an average home in the country’s big cities and roughly $3,000 every year in mortgage payments, a release reads.
RESCON states taxes are the main reason for the housing crisis and the council has been advocating for tax cuts for years, watching as the situation progressively gets worse.
“This proposed tax cut is crucial and a step in the right direction towards making new homes more affordable, especially for first-time homebuyers,” Lyall adds. “Sales taxes on new housing in the Greater Toronto Area are among the highest in North America and have pushed new homes beyond the reach of most working Canadians. High taxes and development charges are one of the reasons for the housing crisis. This is a travesty that can not continue.”
A report done by Canadian Centre for Economic Analysis found that the tax burden on new home construction is two times higher compared to other sectors of the economy. Taxes on the purchase of a new home have climbed massively from about 24 per cent in 2012 to 36 per cent today.
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