2025 Federal Election - full housing plans now released

By David Young

Following up on my previous article here on proposed changes to GST/HST on Pre-Construction homes, the two major political parties have announced what appears to be their full and final proposed housing plan for the 2025 Federal election as of April 10^th, 2025.

• GST/HST on Pre-Construction Homes (previous article here)
  
  The Conservatives announced in October 2024 that they proposed to scrap GST for all buyers of pre-construction homes up to $1 million. On April 10^th, 2025, Pierre Poilievre announced an increase to the limit from $1 million to $1.3 million.
  This may result in savings of up to $58,584.07. There is however no guarantee that builders will pass on these savings to purchasers.
  
  
• Cuts to Development Charges
  
  Municipalities (Cities and Towns) have increased Development Charges significantly over the last 15 years. For example, the City of Toronto increased Development Charges on pre-construction condos by over 1,000% between 2009 and 2024, from $4,985 to $52,675 for a 1 bed condo.
  
  The Ontario Provincial Government in 2022 attempted to restrict increases in these Development Charges but in 2024 reversed many of the changes due to complaints from Municipalities.
  

  Conservatives

  On April 10^th, 2025, Pierre Poilievre announced a plan for the Federal Government to reimburse cities for half of every dollar they cut in Development Charges, up to a maximum of $25,000 per home. Therefore if a Municipality offers the maximum relief, this could therefore result in a combined cut of $50,000.
  
  The Tory leader did not specify if they would force builders to pass on these savings, similar to the proposed GST cut. A majority of pre-construction agreements are negotiated to include “capped” or “limited” Development Charges, where the purchaser pays a portion and the builder pays the remaining balance.Therefore, if the reduced Development Charge rates still amounted to greater than the capped amount, purchasers would see no savings.
  
  For example:
  • Current Development Charges $52,675;
  • Capped Development Charges $15,000+HST;
  • Reduced Development Charges as funded by the Federal and Municipal Governments $20,000;
  • Equals no savings to the end user purchaser.
    
    

  Liberals

  On March 31^st, 2025, Mark Carney’s Liberals issued a full housing plan. As part of the plan, they proposed to cut Development Charges in half for multi-unit residential housing and work with Provinces to make up the lost revenue for 5 years owing to Municipalities. 
  
  For either plan, the larger question remains – will the Municipalities willingly sign up to a cut in Development Charges if they will lose revenue or have to fight for reimbursement?

• Building More Homes
  

  Conservatives

  They have previously announced plans to limit Federal infrastructure funding if municipalities do not speed up building permits and increase 15% more home building per year. The aim is to increase the speed in which projects are approved and can begin construction.
  

  Liberals

  The Liberals have proposed a new entity called “Build Canada Homes” (BCH). It is proposed that BCH will expand on the experience of the current Housing Accelerator Fund as follows:

• BCH will act as a developer to build affording housing on both public land and acquired private land;
• control all affordable housing programming under one umbrella;
• ·offer $25 billion in debt financing and $1 billion in equity financing to prefabricated home builders;
• ·offer $10 billion in low-cost financing and $4 billion in long-term fixed-rate financing to affordable home builders;
• $6 billion towards deeply affording housing, supportive housing, indigenous housing, shelters, student and seniors housing.
• issue bulk orders from manufacturers to create sustained demand, allowing skilled trades further opportunities to develop the workforce, prioritizing sustainable products.

In regards to faster building, similar to the Conservatives, the Liberals propose forcing Municipalities to issue reports on progress to speed up approval timelines. They also plan on simplifying Building Code, eliminating duplicative inspections and streamline regulations for prefabricated housing and modular housing.

They wish to pre-approving standardized housing designs across all public lands and allow builders to apply for approvals for multiple projects at once, with a fast track status for well-recognized builders with previous government experience.

• Rental Buildings
  Finally, the Liberals plan on reintroducing the Multiple Unit Rental Building (MURB) cost allowance. This is a program from the 1970s that helped stimulate rental construction by offering builders tax breaks on taxable income in the first few years a building is leasing units. According to the plan, this policy helped produce nearly 200,000 rental units between 1974 and 1981.

If you have any questions about the proposed changes and where it might impact you going forward, please do not hesitate to reach out to David Young at (365) 509-2029 ext.106 or dyoung@sorbaralaw.com