Are Canadian Governments a Vampire in Housing Affordability?

A new study of Vancouver, Kelowna and Saanich confirm government costs consume as much as 29 per cent of an apartment purchase price and 33 per cent of average rent. A similar Ontario-based study finds government costs as high as 31 per cent.

Frustrated home seekers wanting a modest condo can now see the giant and growing bite of all levels of government in their purchase or rental costs, revealed in a recently updated study by Ryan ULC.

Vancouver horizon (Photo: Thom Quine via Wikimedia Commons)

Up from the 26 per cent or $220,256 of the total $840,000 cost of a typical new Vancouver 800-sq.-ft. condo apartment in this 2018 study, those numbers are now a whopping 29.25 per cent or $327,565 in government fees, charges and taxes for a similar-sized unit priced at $1.1M. That’s a 49 per cent increase in government fees, taxes and regulation costs in five years, nearly 10 per cent a year. A buyer with a new 25-year mortgage would pay nearly $600K in total costs when those fees are factored into their mortgage with interest! That’s why we thought vampire was an apt name to use for governments.

Removing federal GST ($56K) on new rental units or exempting first-time homebuyers from gifting $20,400 to the provincial government for Property Transfer Tax (PTT) would go a long way to addressing affordability issues. (See Vancouver condo chart example.)

A Vancouver renter fares even worse. Despite rental vacancy rates that are chronically around one per cent or less—a healthy vacancy rate is at least three per cent—builders and renters see no relief on new taxes, fees or policies that deter rental investments. A tenant in a new purpose-built wood frame rental unit of 675-sq.-ft. in Vancouver with a monthly rent of $2,698 per month, pays approximately one third of their monthly rent or $882.70 towards the government charges incurred during the building and development phases.

For Vancouver single-family home buyers, the government fees, charges and regulatory costs are now “63 per cent of the final sale cost of new single-detached homes,” according to the latest 2023 CD Howe report. That amounts to $1.3M of an average sale-priced $2M home.


Ontario Comparison
A separate CMHC report found “government charges can represent more than 20 per cent of the cost of building a home in major Canadian cities” with Toronto and Vancouver being among the worst. Various taxes were not factored into the CMHC report.

The Canadian Center for Economic Analysis confirmed new Ontario homes averaging a $940,400 purchase price have a 31 per cent government bite (see chart), or $288,500 paid to some level of government, growing from 25 per cent in 2012. The CD Howe report found homes in the Toronto area now cost homebuyers $350,000 extra (in government charges) over the cost to build (750K).

Saanich and Kelowna Comparison
For a Saanich condo, up to 10.32 per cent of the purchase cost is attributed to government taxes and fees while a Kelowna condo can be up to 14.63 per cent, depending on whether the unit is a principal residence or rented out.

On a municipal level, we’re finally seeing some positive signs of change from the new Vancouver civic government to cap the cost of their community amenity charges paid by builders toward community centres, libraries, childcare facilities) to a flat fee and allow more home choices on single-family lots. But all levels of government are guilty of handwringing on the housing crisis then layering on additional costs via new tax grabs, fees or green building policies. I’ve seen family grocery lists shorter than all these government costs on homes that buyers and renters pay. Another new regional government fee, the Water Development Cost Charge (DCC) is coming next.

Additional stealth costs are also embedded in prices that buyers don’t even realize. For example, when the government requires 20 per cent social housing to be included in a project, the below cost difference is allocated to all the other units paying a higher rent or purchase price. Sometimes, this is offset by government financial incentives provided to the builder, including more permitted density or fee reductions but this is rarer.

Another tax whopper is the provincial Additional School Tax (AST), paid by the builder annually on any land worth over $3M (on top of property tax). While some narrow exemptions for buildings under construction exist, they can still attract millions in annual costs that will be passed on in purchase prices or rents. Vancouver City’s Empty Homes Tax meant $250,000 a year was levied on a rental and social housing project at 11th Ave. and Renfrew, that took five years for approval to build.

New rentals delivered by homebuilders to help ease the low vacancy rates are also charged five per cent GST on every single unit, paid to the federal government at completion, a cost Sullivan has been advocating for removal. In Vancouver, the GST alone is the largest single tax and could represent nearly 10 per cent or $250.60 of an average rent of $2,698 a month for a 675-sf home. Notably, before the federal Liberals came to power in 2015, they promised to remove this tax, then bailed, he said.

Homebuilders, who take on tremendous risk to finance a project, must maintain a minimum profit margin including contingency, of approximately 15 per cent, or they don’t get bank loans or finance partners funding to proceed. Some of those investors are government employee pension funds that must generate a return for shareholders. No finance partner will knowingly invest in a money-losing building project. In the Vancouver condo budget example, the costs associated with government and development could render the project financially unviable, well beyond what people would pay for that size of home in the marketplace.


  • Cities must fix their bureaucratic approval processes that add many cumulative, annual property tax costs to builders as they wait years for approvals and permits. Application processing times for homebuilders have tripled from 10 – 20 years ago.  On social housing, Victoria reporter Rob Shaw recently noted only approximately 7,696 new housing units for rent or ownership have actually been built and completed in the last six years by BC Housing. That’s 6.8 per cent of the BC NDP’s promised 114,000 homes over ten years.
  • Incentivize more affordable housing and rent-to-own choices through tax rebates for homebuilders.
  • Pre-approve some templated multi- and single-family building designs that can be fast-tracked if submitted by architects/engineers (qualified professionals) similar to the cookie-cutter “Vancouver Special” but for all building types.
  • Establish Back to Basics Budgets (Core Services) Municipal Budgets so property tax increases can be kept in line with people’s ability to pay. Avoid duplication or accepting downloaded social or health programs by other levels of government.


Paul Sullivan is principal and regional leader at Ryan ULC, a global tax services and software provider. They recently acquired the local B.C. commercial real estate appraisal firm Burgess, Cawley, Sullivan, advocates of local business tax relief for more than 40 years.

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