The projected cost of a Goods and Services Tax (GST) holiday for apartment builders is expected to surpass previous estimates by at least a billion dollars, according to a report released by the Budget Office. Blacklock's Reporter says the report indicates that the anticipated cost of $5.8 billion, the highest estimate to date, significantly exceeds the Department of Finance's figure of $4.5 billion.Analysts emphasized the considerable uncertainty surrounding the fiscal impact of the enhanced GST rebate, citing variables such as the number and value of units constructed as key factors influencing the final cost.Introduced through Bill C-56, "An Act To Amend the Excise Tax Act," the GST holiday targets new "purpose-built rental housing" constructed by 2036. While the Department of Finance initially estimated the tax break to be worth around $4.5 billion over the next five years, the Budget Office's latest report projects a higher cost of $5.8 billion between 2024 and 2029.The report outlines specific criteria for eligible units, stipulating that they must be situated in buildings with a minimum of four individual apartments or ten rooms or suites, such as dorm rooms in postsecondary residences. Additionally, these buildings must allocate 90% of their total units to long-term tenants.Finance Minister Chrystia Freeland announced on April 12 that cabinet would expand the sales tax holiday to include purpose-built student residences constructed by colleges and universities. However, the cost of this campus amendment has not been determined.Despite the government's efforts to stimulate housing construction through the GST holiday, neither cabinet nor the Canada Mortgage and Housing Corporation (CMHC) has provided concrete estimates regarding the expected increase in new homes. Housing Minister Sean Fraser acknowledged the challenge of forecasting precise figures, stating that the measure could result in the creation of "millions of people, thousands of people, getting into new apartments."Fraser further emphasized the potential impact of the GST holiday, noting estimates suggesting the creation of 200,000 to 300,000 new homes for Canadians over the next decade.
The projected cost of a Goods and Services Tax (GST) holiday for apartment builders is expected to surpass previous estimates by at least a billion dollars, according to a report released by the Budget Office. Blacklock's Reporter says the report indicates that the anticipated cost of $5.8 billion, the highest estimate to date, significantly exceeds the Department of Finance's figure of $4.5 billion.Analysts emphasized the considerable uncertainty surrounding the fiscal impact of the enhanced GST rebate, citing variables such as the number and value of units constructed as key factors influencing the final cost.Introduced through Bill C-56, "An Act To Amend the Excise Tax Act," the GST holiday targets new "purpose-built rental housing" constructed by 2036. While the Department of Finance initially estimated the tax break to be worth around $4.5 billion over the next five years, the Budget Office's latest report projects a higher cost of $5.8 billion between 2024 and 2029.The report outlines specific criteria for eligible units, stipulating that they must be situated in buildings with a minimum of four individual apartments or ten rooms or suites, such as dorm rooms in postsecondary residences. Additionally, these buildings must allocate 90% of their total units to long-term tenants.Finance Minister Chrystia Freeland announced on April 12 that cabinet would expand the sales tax holiday to include purpose-built student residences constructed by colleges and universities. However, the cost of this campus amendment has not been determined.Despite the government's efforts to stimulate housing construction through the GST holiday, neither cabinet nor the Canada Mortgage and Housing Corporation (CMHC) has provided concrete estimates regarding the expected increase in new homes. Housing Minister Sean Fraser acknowledged the challenge of forecasting precise figures, stating that the measure could result in the creation of "millions of people, thousands of people, getting into new apartments."Fraser further emphasized the potential impact of the GST holiday, noting estimates suggesting the creation of 200,000 to 300,000 new homes for Canadians over the next decade.
