Government-imposed costs on new single-detached houses in Calgary remain among the lowest across the country as a percentage of the selling price.
The latest numbers, released in a report by Altus Group Economic Consulting, commissioned for Canada Mortgage and Housing Corporation, reveal that Calgarians pay 7.9% of the cost of their new home to government, the lowest among all major centres.
The government-imposed costs paid on a new single-detached dwelling totalled on average $39,911 across the country and made up 13% of the median selling price.
In absolute figures, Toronto had the highest level of government-imposed costs (GICs) ($101,526), almost $15,000 above the second highest, Surrey, B.C. ($86,897).
At the other end of the scale, Yellowknife ($14,510) had the lowest level of GICs.
GICs exceeded $60,000 in eight municipalities–Colwood, Kelowna, Vancouver, Burnaby, Surrey, Mississauga, Toronto, and Vaughan.
A second tier of 20 municipalities had GICs between $20,000 and $60,000.
Four municipalities–Yellowknife, Whitehorse, Quebec City and Charlottetown, had GICs of less than $20,000.
In percentage terms, GICs ranged from 18% in Vaughan to less than 5% in Yellowknife.
Toronto represented the median at 13.4%.
In Halifax, Vaughan, Mississauga, Hamilton, Waterloo, and Surrey, GICs represented more than 16% of the selling price of new detached homes. In another six cities–Windsor, London, Ottawa, Montreal, Laval, Longueuil–GICs made up 14% to 16% of house prices.
The lowest percentages were in western cities with moderate housing prices and no PST–Yellowknife, Whitehorse, Grande Prairie and Calgary, all had less than 8%.
The report was commissioned by Canada Mortgage and Housing Corporation.
It suggests that by increasing the costs of building new housing, these costs often counter the economic well being of consumers.
“They can also be harmful to the economy at large and the new housing industry since most of the charges do not apply to the price of existing homes, which now become more financially attractive to prospective buyers,” the report says.
The report found government-imposed costs at all three levels of government were factored into new home prices.
These costs include municipal levies, fees and charges, provincial charges and taxes and the federal GST.
The estimates in the report did not include increases in development costs that result from having to meet building and land development requirements such as building codes, zoning requirements and other regulations like green bulding and subdivision regulations.
These are intended to help pay for off-site infrastructure required by new housing development.
“In theory, there is supposed to be a connection between the nature of the development being levied and the off-site services obtained but this is often difficult to assess in practice.”
Government imposed costs tend to be lower for other dwelling types, such as row houses and condominium apartments.
Not all cities had enough new construction activity to be included, however, the pattern of GICs for row houses and condominium apartments matched that for single-detached dwellings.
The highest GICs for condominiums were in Vaughan and Mississauga (infrastructure cost), Halifax (sales tax) and Vancouver (high sales price and land values).
The lowest were in Quebec (no infrastructure charge) and Edmonton and Calgary (no PST).
The composition of the GICs varied across the country.
The federal GST, which is directly linked to the selling price, represented the largest share of the total GIC in municipalities with high prices such as Toronto and Vancouver. In cities with high infrastructure charges (DCCs), such as Edmonton, Saskatoon, Hamilton and Waterloo, the municipal share made up more than half of GICs.
Provincial charges can be the largest component of the GIC in municipalities where the provincial sales tax is based on the selling price, for example in St. John’s, Moncton, Longueuil, and Laval.
For all municipalities surveyed, application and processing fees represented the smallest identifiable component, less than one per cent of GICs.
In about half the municipalities, the largest share was either infrastructure charges (especially in the West) or land dedications (in Quebec, Atlantic Canada, Toronto, Calgary and parts of British Columbia).
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