Mark Carney Reaffirms Pledge To Eliminate GST For First-Time Homebuyers

In a significant move to address Canada's housing affordability crisis, Prime Minister Mark Carney has announced the removal of the Goods and Services Tax (GST) for first-time homebuyers purchasing new or substantially renovated homes priced up to $1 million. This policy aims to save Canadians up to $50,000, making homeownership more accessible for young people and families.

During a speech in Edmonton, Prime Minister Carney emphasized the importance of stable housing as a foundation for personal success and economic growth. He stated, "Without housing it's hard to focus on your future, without housing it's hard to start a family, and without housing we can't build the strongest economy in the G7." The GST exemption is expected to reduce upfront housing costs, allowing more Canadians to enter the housing market sooner.

This initiative aligns with promises made during Carney's leadership campaign and addresses concerns about housing affordability, especially in urban centers where home prices have surged. By including "substantially-renovated" homes in the tax exemption, the policy encourages both new construction and significant home improvements, aiming to increase housing supply nationwide.

The GST exemption is anticipated to save first-time buyers substantial amounts. For instance, in Metro Vancouver's Eastside, where the benchmark condo price was $691,300 in February 2025, buyers could save approximately $34,600. On the Westside, with condos averaging $839,600, the savings would be around $42,000. These savings can significantly ease the financial burden on first-time buyers.

The Canadian Home Builders' Association (CHBA) has expressed support for the policy, highlighting the need to explore all avenues to improve housing affordability. CHBA CEO Kevin Lee noted that addressing the GST on new housing is a step toward ensuring better affordability and supply in the face of rising construction costs.

While the policy has received praise, some critics warn that eliminating the GST could lead to higher home prices, potentially offsetting the tax savings. Additionally, concerns have been raised that without accompanying measures to increase housing supply, the policy might primarily benefit developers and investors. Nonetheless, Prime Minister Carney remains committed to tackling the housing crisis, with plans for further initiatives to enhance housing affordability and availability across Canada.