Ottawa home builders appeal to Feds to fulfill promises to cut development charges in half and institute GST rebate for new homes

Ottawa, ON — The Greater Ottawa Home Builders’ Association (GOHBA) is urging the federal government to fulfill its election promises to cut development charges (DCs) in half and institute a 100% GST rebate for new homes. With the release of the federal budget on November 4 and recent comments by federal housing minister Gregor Robertson stating that more details are to come, GOHBA members remain hopeful these measures will be included in the budget to help address the housing affordability crisis in Ottawa and across the country.

 

“In just two years, development charges in Ottawa have increased 25% for new homes outside the greenbelt and 30% for new homes inside the greenbelt. Cutting these charges in half would return them to 2016 rates, immediately improving project viability and helping to deliver more homes faster,” says Jason Burggraaf, GOHBA’s Executive Director. “According to research by housing affordability expert, Mike Moffatt, DCs were a strong contributor to the escalating prices seen in Ottawa’s housing market.”

 

Reducing DCs will also help reduce the amount of tax-on-tax collected that’s driving up prices on new homes. Fees like DCs are applied before HST and the provincial land transfer tax, meaning buyers are paying additional taxes on already inflated costs. Lowering DCs can help lower the cost to build, enabling homebuilders to get shovels in the ground sooner so more homes can be sold at affordable prices.

 

GOHBA is further calling upon the federal government to expand eligibility of the GST rebate to all new homes. Although the government originally announced that a 100% rebate would only be applicable for first-time buyers, GOHBA is recommending the government expand eligibility to all homes to reduce another government-imposed cost on new housing.

 

“There is not enough first-timers buying brand new homes to help Ottawa address the housing crisis,” says Burggraaf. “Buyers are waiting on the sidelines because they are expecting a reduction in GST, they are expecting a matching PST reduction, and they are hearing about the possibility of reduced development charges. And who can blame them?”

 

“There is a lot of hesitation in the market right now, and the government needs to help lower costs so homebuilders can increase supply, and help families across the city.”

 

GOHBA remains committed to working with all levels of government to ensure that policies support housing affordability and supply for Ottawa’s current and future residents.