A Housing Policy That Actually Helps
I think we all take our shots at the government from time to time.
And to be fair, there are often good reasons. But the biggest reason might simply be that it’s easy.
When you’re doom-scrolling social media and seeing video after video about affordability, sitting at the kitchen table going through a stack of paperwork while doing your taxes, or chatting with friends on a patio about the rising cost of everything, it’s pretty easy to throw your hands up and ask, “What are they even doing?”
Government can feel like a faceless thing. Even though it’s made up of real people doing real work, it often feels distant from our everyday lives. That distance makes it easier to criticize and easier to assume nothing meaningful is happening at all.
But every once in a while, it’s worth stepping back and recognizing when the “faceless thing” actually gets something right.
Last week, on housing, I think they did.
Housing affordability continues to be one of the biggest issues facing Canadians. For some people it’s about trying to buy their first home. For others it’s about simply keeping up with the rising cost of living. Either way, the question of how we make housing and life in general more affordable has been front and centre in recent elections and policy conversations.
Last week the federal government’s Making Life More Affordable for Canadians Act received Royal Assent. For people who work in housing and affordability spaces, it’s a piece of legislation that includes some meaningful changes.
Like most government policy, it isn’t perfect. There will always be room to debate what could have been done differently or how it could be improved. But sometimes the pursuit of perfect policy can get in the way of real improvements that help people right now.
One of the key housing measures in this legislation is the elimination of GST for first-time home buyers on new homes.
This isn’t a silver bullet for the housing crisis. No single policy change will be. But it is meaningful because it represents real savings for people trying to enter the housing market.
For example, if someone purchased a newly built home for $700,000 that wasn’t HST-inclusive, the tax bill alone would normally be $91,000. At that price point the only rebate available is the provincial one, which maxes out at $24,000.
That means buyers could be looking at roughly $67,000 in additional savings under this change.
Often those taxes are baked into the purchase price you see listed, so buyers don’t always notice them directly. But the financial impact is still there. Reducing the cost of a home by tens of thousands of dollars doesn’t just lower the purchase price, it lowers the size of the mortgage that follows.
The affordability impact of taking your mortgage payment down by a few hundred dollars a month is massive!
A few hundred dollars less on a mortgage each month can make a real difference in a household budget. It can cover a kid’s birthday party, a few tanks of gas, or one of those unexpected expenses that always seem to pop up. (Like a certain child’s retainer that keeps getting left on the table… and eventually gets stepped on. Hypothetically speaking.)
The point is: these kinds of policy changes have real-life impacts.
So much government policy feels abstract because we never see how it connects to our daily lives. This one is different. It quite literally makes homes more affordable for people.
And when that happens, even if it’s not perfect, it deserves to be recognized.
-Philip Mills
Philip Mills, CEO Habitat Waterloo Region
