I want to take a moment to compare housing promises by our two candidates in this election.
Both Mark Carney and Pierre Poilievre is promising a GST tax cut on houses, but how they are doing it is very different.
The Liberal party vows to eliminate the GST on all homes up to $1 million for first-time home buyers. (Ref: https://liberal.ca/liberals-launch-2025-campaign-with-middle-class-tax-cut/)
While the Conservative Party vows to cut the GST on all new homes under $1.3 million. No first-time home buyer condition, but limited to newly built homes. (Ref: https://www.conservative.ca/poilievre-to-axe-gst-on-new-homes-under-1-3-million/)
Before I dig into this, I want to say both of these plans are not very great, with Mark’s plan only being slightly better. And I’ll explain why.
For numbers I’m going to use RE/MAX average residential for the Moncton area, which has $383,334 for January 2025, and I’m going to round that up to $400,000 for a nice number. I’m also going to use the actual GST of 5% as that is applicable to most provinces, and I’m not sure how it works with provinces with HST instead of GST/PST.
So we have 3 numbers:
On average $400,000 home you can save $20,000.
If you’re wealthier, you can save up to $50,000 under Mark’s plan, or $65,000 under Pierre’s plan.
So why does these plans suck?
1. The savings are only accessible for those who already have the ability to afford the minimum down payment. And if you’re very well off to afford a $1,000,000+ home, you can save more than 2x the amount of someone just trying to get into home ownership. In otherwords, both of these plans helps the wealthy significantly more than Canadians who really need the assistance.
2. It doesn’t really address the underlying issue. There is a housing shortage. There is a lot more demand for housing. This is where Carney’s plan is slightly better than Pierre’s plan. Mark’s incentive is limited to first time home buyers, which means the incentive can be taken advantage of only 1 time.
Pierre’s plan has no limitation, which means the wealthy will be able to continuously save the more they buy up properties. It will greatly benefit landlords that can buy up housing for rentals. Which might adversely affect demand and raise general housing cost greater.
