Making Moves – Carney Pledges to Cut GST for First-time Buyers of Homes Under $1M

The new measure, unveiled in Edmonton just days before the expected launch of the federal election campaign, would save buyers as much as $50,000, Carney said. It also aims to stimulate new housing construction across Canada by lowering upfront costs and encouraging builders to bring more supply to market.

“Canada is in a housing crisis—demand has gone up, supply has not kept pace, and prices are too high,” Carney said during the announcement. “Eliminating the GST will save first-time homebuyers up to $50,000 and spur housing construction across the country. We will announce a series of new measures to increase housing supply shortly. It’s time for focused action to solve the housing crisis, and it’s time to build a Canada you can afford.”

The promise delivers on a key plank of Carney’s leadership campaign and echoes a similar commitment made last fall by Conservative Leader Pierre Poilievre. With affordability issues dominating public concern, both major parties are racing to position themselves as the party best equipped to fix Canada’s broken housing system.

Under current federal rules, new homes priced under $350,000 are fully eligible for a GST rebate, with a partial rebate available up to $450,000. But with average home prices far exceeding that threshold in most major cities, many buyers—and builders—have effectively been shut out of the tax relief. Carney’s proposed GST exemption would apply to all first-time buyers purchasing a home up to $1 million, expanding the benefit to a broader group.

Housing affordability has become one of the defining challenges of the past decade, particularly for young Canadians and newcomers. According to the Canada Mortgage and Housing Corporation (CMHC), the country needs to build an additional 3.5 million homes by 2030 to restore affordability. But builders face headwinds from high interest rates, labour shortages and regulatory delays.

The federal government says it plans to unveil a suite of additional measures in the coming weeks to help address these barriers and accelerate construction. Carney has framed housing not only as a crisis of affordability but as an economic imperative.

“Our government is laser-focused on lowering costs for Canadians and making homeownership a reality,” the government said in a release. “The Government of Canada will confront the housing crisis head-on and build the strongest economy in the G7.”