GST break for first-time home buyers

Ottawa’s new budget includes a tax break for first-time home buyers.

The federal government says any first-time home buyer purchasing a new home valued under $1.5 million will not have to pay the Goods and Services Tax (GST).

“It looks like it’s not enough, it’s a starting point, but they still need to work on that,” said one Vancouver resident to The Leader Spirit.

In the Greater Vancouver area, the average price for a detached home is over $2 million – renters say the tax break isn’t enough for first-time buyers to enter the market.

“The prices are really high right now. They’ve been going down the last couple of months, but they still are pretty high since the pandemic,” said the resident.

“If it’s B.C. wide, it’s going to force first time home buyers out of the city, is what I’ll supposed will happen,” said another resident.

“It seems unlikely that even with the stipulations made, people are going to be able to afford housing,” commented a third Lower Mainland resident.

The federal government says removing the GST could shave tens of thousands off the total cost for first-time home buyers while encouraging more builders, but renters feel that doesn’t address the affordability gap.

“I don’t think it’s enough for now. I have seen a lot of people struggling in that situation,” said a resident.

Vancouver remains one of the most expensive markets in North America.

B.C.’s Finance Minister Brenda Bailey says federal help is welcome.

“I’m really glad to see the work being done on the housing file,” she told reporters on Tuesday.

“This is a file that British Columbia has been leading on across the country, and we look forward to continued collaboration to ensure that every British Columbian has a home.”

If the budget passes through parliament, the first-time home buyers tax break will take effect next year, as part of Ottawa’s plan to double home building nationwide.