Conservative Leader Pierre Poilievre said he would eliminate the 5% national sales tax on new homes sold for less than C$1 million ($719,700) if elected prime minister. Poilievre, whose party leads by about 20 points in recent polls, said the reduction would save about C$2,200 a year in mortgage payments for an C$800,000 home.

If the Conservatives win the election currently scheduled for October 2025, he would also push provinces to eliminate their sales taxes on new homes, Poilievre said in a news release.

The high cost of housing in Canada has helped lower Prime Minister Justin Trudeau’s popularity, particularly among younger voters. The benchmark house price has jumped 61% since he took office in 2015, and rising interest rates have pushed housing affordability close to its worst level since the early 1990s .

The Trudeau government has spent billions and promised much more to boost residential construction. Through its C$4 billion Housing Acceleration Fund, it has so far transferred about C$1 billion to municipalities that cut red tape and allow dense zoning for housing, including $471 million Canadians in Toronto. It also created a housing infrastructure fund that is expected to be handed over to the provinces on January 1 – if those governments agree to allow an increase in housing supply.

Poilievre said he would cancel the remaining C$3 billion of the Housing Acceleration Fund and eliminate the C$5 billion Housing Infrastructure Fund entirely to help pay for the tax cut.

He also said the tax cut would boost new housing construction enough to generate an additional C$2.1 billion a year for the government. Therefore, his plan would generate enough savings and new revenue over four years to offset the estimated C$4 billion annual cost of the tax cut, Poilievre said.

“This is a fiscally responsible plan to cut taxes, build homes and bring back Canada’s promise of hard work allowing people to buy homes in safe neighborhoods,” he said. Poilievre said at a press conference.

The government already offers a partial sales tax rebate, representing approximately 36% of the tax paid on new or substantially renovated homes, worth up to C$450,000.

Trudeau’s Housing Minister, Sean Fraser, said there was a fundamental problem with Poilievre’s proposal: He plans to fund it by cutting government programs that “are actually going to provide housing for middle-class families.” and low-income.

The Housing Acceleration Fund has pushed nearly every major city in the country to adopt more permissive zoning and move to digital permitting to make housing construction easier and faster, he said.

“These funds make a difference. They will make a bigger difference in the future and to remove them now would be absurd,” he told reporters in Ottawa.

Fraser also raised concerns that Poilievre’s plan would help real estate investors buy multiple homes through a corporation, at the expense of low- and middle-income taxpayers.

Mike Moffatt, policy director at the Smart Prosperity Institute and a former economic adviser to Trudeau, estimated that Poilievre’s tax cut would cost about C$4.5 billion a year. Although he expressed concern about the Conservatives’ plan to cancel the housing acceleration fund, Moffatt acknowledged the tax cut would spur more construction.

“This could really help with affordability for young, middle-class Canadians,” he said on X.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)