Repealing the Goods and Services Tax (GST) on certain new home purchases, a policy proposed by both the Liberals and the Conservatives, would cost $400 million to $2 billion annually, according to the Parliamentary Budget Office (PBO).
The Liberal Party has said it would get rid of the GST on new and “substantially renovated” homes costing under $1 million for first-time homebuyers, while the Conservative Party has proposed to get rid of the GST on new homes costing up to $1.3 million, up from the $1 million initially announced in October 2024.
According to the PBO, the Liberals’ plan would cost $383 million in 2025, $378 million in 2026, $391 million in 2027, $413 million in 2028, and $429 million in 2029, for a five-year total of nearly $2 billion, as first reported by Blacklock’s Reporter.
The Conservatives’ plan, meanwhile, would cost $1.8 billion in 2025, $1.9 billion in 2026, $2 billion in 2027 and 2028, and $2.1 billion in 2029, costing a total of $9.8 billion over five years.
PBO analysts wrote in the report “Election Proposal Costing” that the cost of the measures was calculated as the difference in sales tax revenue relative to the current policy. “No behavioural responses were included,” the PBO said. “The main sources of uncertainty relate to the estimated distribution of the prices paid by eligible new home purchasers, the projected number and value of new units sold, as well as the assumed lack of behavioural response.”
In 1991, Parliament started charging the sales tax on homes priced from $450,000 upwards, which was at that point a benchmark that impacted only luxury properties. The threshold at the time benefited 95 percent of homebuyers, by industry estimate, but was never indexed to the cost of living.
The Department of Finance in a Goods and Services Tax Technical Paper at the time promised to review tax thresholds every two years and “adjust them as necessary to ensure that they adequately reflect changes in economic conditions and housing markets.” However, the rebate threshold has never been adjusted.
When Conservative Leader Pierre Poilievre first proposed getting rid of the GST for housing back in October 2024, he said Parliament never intended to collect sales taxes on family bungalows. “That threshold was supposed to go up ... but it didn’t,” he said. “Now, good luck trying to get a house for $450,000. You can’t find anything for that.”
According to an April 2025 report from the Canadian Real Estate Association, the national average home price is forecast to decrease by 0.3 percent annually to $687,898 in 2025. In 2026, the average home price is predicted to increase by 1.2 percent from 2025 to $696,074.
An IPSOS poll from December 2024 found that 69 percent of Canadians strongly agreed that Canada is in the midst of a housing crisis, with 26 percent saying they somewhat agree and 4 percent saying they do not agree.
