Prime Minister Mark Carney has announced his government will eliminate the federal sales tax (GST) for first-time homebuyers on all new and “substantially renovated” homes under $1 million, mirroring a policy first announced by the Conservatives back in October.
“This is a big deal, because first-time homebuyers are the major purchasers of new and substantially renovated homes,” Carney said during a March 20 announcement in Edmonton, adding that the measure could give up to $50,000 in savings for families entering the housing market.
Carney said the Liberal Party will allocate funding in modular and pre-fabricated housing to speed up construction times, eliminate barriers to housing by reducing paperwork, taxes, and development fees, and facilitate training for more construction workers.
He also highlighted the Liberals’ Housing Accelerator Fund and said his government will “reinforce things that are working.” The $4 billion fund, launched in 2023, is meant to incentivize local governments to remove barriers to new housing.
During the Liberal leadership campaign, Carney vowed to “supercharge” Canada’s housing plan and cap immigration until it can be “returned to its sustainable pre-pandemic trend.” The Liberals rapidly increased the country’s immigration rate and boosted Canada’s population from 38 million in 2020 to an estimated 41.7 million in late 2024, before announcing slight restrictions on immigration.
Conservative Leader Pierre Poilievre made a similar housing pledge to Carney’s last October, vowing to remove the GST from new homes under $1 million if his party formed government. He said this measure would save buyers $40,000 per year in mortgage payments on $800,000 homes, and would spur the construction of an additional 30,000 homes per year.
The Conservatives have also proposed fixing Canada’s housing crisis by rewarding cities that remove “gatekeepers” to new homes and meet homebuilding targets, withholding transit and infrastructure funding from cities that do not build sufficient high-density housing around transit, and listing 15 percent of the federal government’s 37,000 buildings and appropriating federal land to be turned into housing.
“Only months ago, Liberals voted unanimously against my idea of taking the GST off new homes,” Poilievre said on March 20.
“Now—a few days before calling an election — they plagiarize me again. Liberals will never do this policy. They are just trying to trick people into giving them a fourth term.”
Housing affordability is forecast to be an issue for Canadians for the foreseeable future, with a December 2024 report from the Parliamentary Budget Officer predicting that 2.6 million Canadian households will be in need of new housing by 2027. It said 2.4 million households are already in “core housing need” because their dwellings are in need of major repairs, do not have enough bedrooms, or is costing them 30 percent or more of their income before taxes are accounted for.
