Housing affordability has become one of the central themes of the current election campaign in Quebec. Virtually all major parties are offering their own ways to help people buy their first home—from increasing tax credits to help with a down payment and refunding part of the taxes when purchasing a new home.
But the main question is different: will these measures actually make housing more affordable, or will some of the public money ultimately end up in sellers’ pockets?
In brief
- CAQ proposes increasing the maximum tax credit for a first-time buyer from 1,400 to $7,000.
- PQ wants to raise it to $3,000, and also refund first-time buyers the TVQ paid when purchasing or self-building a new home—potentially up to $45,000.
- PLQ proposes reducing the tax burden on new construction priced up to $500,000. The maximum savings would be up to $10,000 for a house or condominium and up to $30,000 for a multi-unit building. The measure is not limited to first-time buyers.
- QS proposes government loans for down payments of up to $50,000. The property must be purchased and later sold below the market median price.
- PCQ does not provide, in its platform, for a separate measure directly aimed at helping homebuyers.
What are the parties proposing?
CAQ: a tax credit up to $7,000
Coalition avenir Québec proposes significantly increasing the existing tax credit for people buying their first home: from $1,400 to $7,000.
According to an estimate cited in an analysis of the parties’ financial platforms, this measure would cost the government about $600 million over five years.
PQ: credit plus a TVQ refund
Parti québécois proposes a more moderate increase in the tax credit—to $3,000.
However, the party also proposes refunding first-time buyers the TVQ paid when purchasing or self-building a new home. The maximum refund could reach $45,000.
The cost of this measure to the government is estimated at about $280 million over five years.
PLQ: reduce the tax on new construction
Parti libéral du Québec is not focusing only on first-time buyers.
The party proposes easing the tax burden on new housing priced up to $500,000. Potential savings would be up to $10,000 for a house or condominium and up to $30,000 for a multi-unit building.
According to the estimate, the financial platform provides for spending of about $475 million over five years.
QS: help with the down payment
Québec solidaire proposes a different mechanism—government loans for a down payment of up to $50,000.
But not all buyers will be able to use such a program. The home must be purchased at a price below the market median price. Upon resale, part of the amount received from the government will be repaid, taking into account the increase in the property’s value. The home itself must also be sold below the market median price.
In addition, QS proposes a tax credit of up to $1,200 for a home inspection before purchase.
At the same time, the party proposes abandoning the current mechanism for refunding part of the land transfer duties, known as the “welcome tax.”
According to the estimates provided, the inspection credit would cost about $184 million over five years, while eliminating the refund of land transfer duties would allow the government to receive about $560 million.
PCQ: no separate program
Parti conservateur du Québec did not include in its platform a separate measure specifically intended to make it easier for first-time buyers to access homeownership.
Why might a tax credit not be as effective?
At first glance, increasing assistance to the buyer seems like a simple solution: if a person is short a few thousand dollars to buy a home, the government can give them that money through a tax credit.
But the economic effect may be more complex.
As Antoine Genest-Grégoire, a professor in the Taxation Department at the Université de Sherbrooke and a researcher at the Chaire de recherche en fiscalité et en finances publiques, explains, such tax credits traditionally raise questions among economists.
The reason is the interaction of supply and demand.
If a large number of potential buyers simultaneously receive an extra $3,000 or $7,000, their purchasing power increases. With a limited number of homes available, this can boost demand.
As a result, part of the government assistance may be reflected not in a reduced financial burden for the buyer, but in higher real estate prices.
In other words, there is a risk of the following chain:
government assistance → more money for buyers → higher demand → upward pressure on prices → part of the benefit goes to the seller.
At the same time, government spending remains real.
Why is support for new construction different?
Tax refunds when purchasing a new home work somewhat differently.
In this case, government support is tied specifically to the appearance of a new housing unit. As Genest-Grégoire notes, even if part of the subsidy ultimately ends up being incorporated by the seller into the price, to obtain the benefit it is necessary to build new housing.
Therefore, such a policy can both support demand and stimulate supply.
This is an important difference from simply paying all first-time buyers: an increase in supply can partially offset the additional demand.
However, the result does not appear instantly. Construction takes time, and the measure itself costs the budget hundreds of millions of dollars.
What is special about QS’s proposal?
The Québec solidaire mechanism is fundamentally different from a standard tax credit.
The government does not simply transfer money to the buyer; it provides a loan for the down payment. When the property is sold, the funds must be repaid to the government along with an amount linked to the increase in the home’s value.
Thus, the direct budgetary costs under such a scheme are structured differently.
But there are limitations here as well. The program is designed for properties within a certain price range, and the conditions for purchase and subsequent resale may limit the pool of potential participants.
A similar idea was already used by the Société canadienne d’hypothèques et de logement; however, the federal program was discontinued after four years. The terms of the previous program differed significantly, so a direct comparison of the two mechanisms is difficult.
Why have parties started talking so much about housing?
According to Philippe Dubois, a professor at the École nationale d’administration publique, the current situation is not only related to the real estate market.
The rising cost of living is forcing people to postpone or rethink major life plans—including buying a home and starting a family.
Emmanuelle Chokette, a professor of political and strategic communications at the Université de Sherbrooke, notes that in such a situation, a party that does not talk about housing affordability at all may look disconnected from one of the most sensitive issues for voters.
What will happen to prices?
There is no definitive answer here.
If housing supply increases quickly at the same time as support for buyers, part of the effect may show up in the appearance of new units.
If the number of available houses and apartments barely changes, while the number of buyers and their financial capacity grows, there is a risk of additional upward pressure on prices.
That is why economists usually consider not only the size of assistance to the buyer, but also what happens to housing supply.
For the buyer, the difference can be significant: receiving a few thousand dollars in assistance is not the same as buying a home that has become a few thousand dollars cheaper.
Frequently asked questions
Which party offers the largest tax credit for a first-time buyer?
CAQ proposes increasing the maximum credit to $7,000. PQ—to $3,000.
Who is proposing a TVQ refund?
PQ proposes refunding first-time buyers the TVQ when purchasing or self-building a new home—up to $45,000.
Which party offers help with a down payment?
QS proposes government loans of up to $50,000 under certain conditions.
Does the PLQ proposal apply only to first-time buyers?
No. The proposed TVQ relief for new construction is not limited to them.
Can assistance to buyers lead to higher prices?
According to experts, this possibility exists, especially if demand grows faster than housing supply.
Unique commentary
In the current situation, the debate is not so much about whether people should be helped to buy housing, but about how that help should work.
A direct tax credit is simple and clear for someone who is about to buy their first apartment or house. But the real estate market is structured so that the buyer’s money does not exist separately from the price of the property. If there are more buyers while the amount of available housing remains the same, part of the additional purchasing power may gradually be absorbed into real estate prices.
Support tied to the creation of new houses and apartments looks quite different. Here, government spending can potentially affect not only demand but also supply.
Finally, a government loan for a down payment represents a third model: the state helps a person enter the market, but expects to recover the invested funds in the future.
Therefore, when comparing election promises, it is worth looking not only at the attractive figure—$7,000, $30,000, or $50,000—but also at what happens after that assistance: does the amount of housing increase, does the price of real estate change, and how much does the public budget ultimately pay.
It is precisely these three indicators—assistance to the buyer, housing supply, and the cost to taxpayers—that make it possible to see the full picture.
