Non-profit urges tax reform, streamlined land access in budget appeal
Habitat for Humanity Canada has urged the federal government to prioritize affordable housing in the upcoming budget.
The non-profit organization highlighted two key recommendations for Deputy Prime Minister and Minister of Finance Chrystia Freeland: Defer the Goods and Services Tax (GST) for affordable housing providers and streamline access to surplus federal land.
Habitat for Humanity argued that the GST significantly hinders their ability to provide affordable homes. Unlike market-rate builders, non-profits cannot embed tax costs into selling prices but must either absorb the cost or pass it on to low-income families.
The organization stated that GST relief would allow them to build significantly more units, citing that in the GTA alone, 13 additional units could be constructed for every 100 units on which GST is waived.
In some cases, the combined provincial and federal sales taxes on newly built affordable homes can reach as high as $80,000 per unit.
Read more: Will the feds' GST cut on rental construction accelerate the pace of homebuilding?
“Affordable housing providers are paying more in fees and taxes back to governments than they receive in government funding to help build affordable homes,” Habitat said in a Press release. “GST relief for non-profit builders like Habitat would represent less than 0.1% of total government revenue from home sales and extend the same tax relief the federal government already offers for new rental housing.”
The second major challenge for Habitat for Humanity is acquiring suitable land for affordable housing projects. Non-profit builders face stiff competition from for-profit developers.
While acknowledging their success in utilizing surplus federal land in some provinces, the organization expressed concern that existing processes for acquiring such land often hinder progress, delaying the creation of mixed-income communities.
“Budget 2024 is an opportunity to build a future where every Canadian has safe and decent housing,” said Julia Deans, president and CEO of Habitat for Humanity Canada. “Through a simple taxation change and streamlined processes, the federal government can help non-profit builders like Habitat for Humanity get more houses built, and more families on the path to the security and independence of owning their own home.”
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