Why Ottawa’s Home Prices Could Keep Climbing — Even With a GST Cut
Let’s talk about this GST break for first-time buyers because on the surface, it sounds like a slam dunk. But if you dig just a little deeper, you’ll find the real issue has nothing to do with taxes... and everything to do with fees, red tape, and a broken building system.
The federal government’s move to eliminate the 5% GST on new homes up to $1 million should, in theory, make homes more affordable. But here’s the thing, Desjardins and pretty much every builder I know is waving a red flag.
More buyer demand? Check.
More supply? Not even close.
That’s a recipe for price inflation, not affordability.
That GST cut might never make it to your bottom line.
Here’s the part nobody wants to talk about.
In Ottawa, the average builder forks over $60,000 to $65,000 per single-family home — just in development charges, permits, and fees. That’s before a shovel even hits the dirt.
Inside the greenbelt? You’re looking at $48,000+ in development charges alone. Outside? Nearly $58,000. Add permits, inspection fees, service charges, and it adds up fast.
These costs are built into the price of every new home. So while we’re debating tax cuts, the real financial drain is sitting in city hall.
If we really want to improve affordability:
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Cut back on excessive development fees
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Streamline approvals and reduce red tape
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Make it faster and cheaper for builders to bring homes to market
Because if builders are being taxed and fee’d to death, those costs go straight to the buyer. And no GST break in the world is going to fix that.
Final Thoughts
Want real affordability? We need structural change, not just tax headlines.
Let’s stop putting the spotlight on federal band-aids and start focusing on the local costs that actually make homes unaffordable.
If you know a builder please send this to them and see what they have to say about the GST Rebate.
Reach out if you're thinking about buying new. We know where it works best.
Greg
