On May 27th, His Majesty King Charles III read the Speech from the Throne, which reiterated the importance of housing to the Government as well as several of their proposed policies to improve the delivery of homes to Canadians: 

“Critically, the Government will undertake a series of measures to help double the rate of home building while creating an entirely new housing industry – using Canadian technology, Canadian skilled workers, and Canadian lumber. The Government will introduce measures to deliver affordable homes by creating Build Canada Homes. This mission-driven organization will act to accelerate the development of new affordable housing. It will invest in the growth of the prefabricated and modular housing industry. And it will provide significant financing to affordable home builders. The Government will make the housing market work better, including by cutting municipal development charges in half for all multi-unit housing. The Government will drive supply up to bring housing costs down.” 

The same day, the Government announced the tabling of a Ways and Means Motion to implement their promise to “Eliminate the Goods and Services Tax (GST) for first-time home buyers on new homes valued up to $1 million … and lower the GST for first-time home buyers on new homes valued between $1 million and $1.5 million.”  

In their Backgrounder on the GST changes, more details on the Rebate for first-time home buyers (FTHBs) is provided. For homes valued above $1 million, the Rebate will “… be phased-out in a linear manner,” so a $1 million home would receive a $50,000 rebate and “… a home valued at $1.25 million would be eligible for a 50% GST rebate (a rebate of up to $25,000).” There would be no rebate for homes valued at more than $1.5 million.  

In terms of timing, the “… GST rebate would generally be available if: 

• the agreement of purchase and sale for the home is entered into with the builder on or after May 27, 2025 and before 2031; and 
• construction of the home begins before 2031 and the home is substantially completed before 2036.” 

They also clarified first-time home buyers must be 18 years old; a Canadian citizen/permanent resident, and “… not have lived in a home, whether in or outside Canada, that they owned or that their spouse or common-law partner owned in the calendar year or in the four preceding calendar years.” They also cannot claim the “… Rebate if their spouse or common-law partner previously claimed a FTHB GST Rebate.” In addition, “To qualify … at least one of the purchasers of the home would need to be a ‘first-time home buyer’ that is acquiring the new home for use as their primary place of residence. That individual would also need to be the first individual to occupy the home as a place of residence.” Other limitations are noted in the Backgrounder as well.  

UDI has responded to the Government’s housing proposals, including the GST changes, in a May 30th letter to the Minister of Finance & National Revenue (the Hon. François-Philippe Champagne) and the Minister of Minister of Housing, Infrastructure & Communities (the Hon. Gregor Robertson). In addition to recommending that the GST rebate extend to all purchasers and that the rebate be set at 100% up to $1.5 million, UDI raised other key industry concerns, including: 

• The need to “Introduce a Canadian version of the U.S. 1031 Exchange, allowing tax deferral when capital gains or income are reinvested into new housing – whether it is non-profit, PBR or for-sale housing;” 
• Making several recommendations on reforming the National Building Code to contain construction costs;  
• That two of the most successful programs driving most of the new purpose-built rental within the past decade, the Apartment Construction Loan Program (ACLP) and CMHC’s MLI Select insurance, have seen eligibility changes that have undermined their effectiveness; 
• The need to use Federal financial supports to local governments to “… drive meaningful reforms at the municipal level,” that would reduce development fees/charges and approval timelines; and 
• A request to “Amend the foreign buyer ban to allow foreign investment in newly constructed homes that carry rental covenants or demonstrable housing contributions,” that should eventually be extended “… to permit foreign buyers to reside in the homes they purchase.”