The head of the Kelowna chapter of the Canadian Home Builders’ Association says this has been a very good week for his industry, with positive news from all three levels of government.
It culminated with Thursday’s announcement by the federal government removing the GST from all new rental construction and from materials and services used by developers.
“I think it has generally been a very good week from what we have heard from the municipality, provincially with the trades then federally with this GST piece,” association executive officer Daniel Winer said.
“It’s nice to see more of a concerted effort coming around housing. I think all levels of government are responding to the call that people are struggling with housing affordability right now.”
It’s the elimination of the 5% GST from the construction of purpose-built rentals that Winer is most excited about. He said it’s been a long time coming.
“We’ve been advocating for this since 2016. It was an original promise of the Trudeau government years and years ago before they decided there were ‘other ways’ to be able to help with housing affordability and the promise got dropped,” he said.
“This is going to be great for purpose-built rentals. This is going to be great for builders and developers, which means it’s going to be great for the general public as those unit come on line and we see that price drop reflected in the cost of rent.”
While the short-term benefit will be a 5% to 7% drop in building costs, Winer hopes in broader terms it will send a strong message to other levels of government. He hopes it will prompt the province to look at its PST portion and municipalities to take a look at development cost charges and other incentives.
Winer also believes the news will spur development in the city.
“It’s going to help on a lot of projects, help them to be more viable,” he said. “It will lessen the risk of developers pausing or cancelling projects outright as they wait for interest rate environments to level out. It means shovels can hit the ground faster.”
And while Winer hopes other levels of government look at their programs, the association will be keeping up the pressure on the feds to support homeowners in a similar way.
He points specifically to the GST new home rebate that gives first time home buyers 36% of their GST back.
However, he said, the home has to be under $450,000, which doesn’t include many homes in the Kelowna market.
“That rebate was introduced in 1991 and it has not been adjusted for inflation or the market once,” he said.
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