Federal Housing Policy Promises
With the whirlwind of the election behind us, it’s time to hope that the Liberals will put some of their housing policies into effect. Here are a few of our favourites:
- First-time home buyers may soon be able to benefit from the proposed new Tax-free First HomeSavings Account. This account would be a place to save up to $40,000 tax-free for Canadians under 40 – and unlike borrowing from your RRSP, there is no requirement to pay yourself back.
- Plans to increase the housing supply via new builds, renovation tax credits, and converting unused office and retail space into housing.
- A temporary halt to foreign buying.
- Possible establishment of a tax to prevent house flipping.
- A ban on blind bidding.
Take a look at this summary of proposed housing policies promised during the election, while keeping in mind that they may not all come to pass. That said, we feel that it’s always a good idea to know what might be coming up, but rest assured that we will always keep you updated as things change.
If you’re considering a move, never hesitate to contact us for a strategy consultation. Be sure to check out our Buyer and Seller services page or download our Buyer Guide or Seller Guide.
The list below was sent to us by Terri Hitchcock, Mortgage Broker Extraordinaire! A local treasure, Terri is in the top 10% of TMG mortgage brokers across Canada, and we are always proud to recommend her.
Housing Supply
The Liberal Party proposes to build, preserve or repair 1.4 million new homes in four years. They plan to achieve that target through some of the following initiatives:
- Housing Accelerator Fund
- Invest $4 billion in a Housing Accelerator Fund to build 100,000 new middle-class homes by 2024-25.
- $2.7 billion for the National Housing Co-Investment Fund
- $600 million for office and retail space conversion to housing
- A temporary ban on foreign ownership
- Foreign citizens would be barred from purchasing Canadian housing for the next two years, unless it’s proven to be for future employment or immigration within two years of the date of purchase.
- “Anti-flipping” tax
- Applicable to residential properties sold within 12 months of purchase.
Mortgage Qualification Policies
- Changes to the First-Time Home Buyer Incentive (FTHBI)
- In 2019, the government introduced the FTHBI, a shared-equity program where eligible first-time buyers can receive up to 10% of their down payment. Through the Canada Mortgage and Housing Corporation (CMHC), the government participates in any gains or losses in home value, until the loan is repaid, either when the home is sold or after 25 years.
- Under the new plan, participants could choose between the shared-equity arrangement or opt instead for a loan that is repayable only at the time of sale.
- Increase mortgage insurance eligibility cap to $1.25 million
- This is an increase from the current cut-off of $1 million. The cap would also be indexed to inflation.
- Reduce CMHC mortgage insurance premiums for new buyers by 25%
- The Liberals said this could save the typical buyer $6,100.
Financial Assistance
- Tax-free First Home Savings Account
- This fund would allow Canadians under 40 to save up to $40,000 towards their first home. The money could be withdrawn tax-free, with no requirement to repay it, and used to purchase a first home.
- $1 billion for rent-to-own projects
- Multi-generational home renovation tax credit
- Provide a 15% tax credit of up to $50,000 for homeowners who add a secondary unit to their home for the use of immediate or extended family.
- Double the First-Time Home Buyer Tax Credit to $10,000 from $5,000
Miscellaneous
- Home Buyer’s Bill of Rights
- Some of the proposed measures include:
- ban blind bidding
- ensure banks and lenders offer mortgage deferrals of up to six months in the event of a job loss or major life event
- ensure transparency on the history of recent home sale prices
- establish a legal right to a home inspection
- Some of the proposed measures include:
