Liberal Leader Justin Trudeau today promised a suite of new measures to help Canadians buy a home at a time when a red-hot housing market has made owning property seem like a distant dream for many young people.
Speaking to reporters in Hamilton, Mr. Trudeau said the real estate market is afflicted by “instability” and “uncertainty” and a COVID-fuelled spike has led to soaring prices, bidding wars, rampant speculation and too many vacant properties. He said the situation demands government intervention to help more people acquire their own homes.
The aggressive plan — that includes billions of dollars in new funding, measures to curb the practice of “flipping” homes, efforts to block foreign nationals from buying homes for two years and new regulatory measures to police exploitative real estate agents — comes at a time when Canadians are telling pollsters that housing is one of the issues they care about most.
The three-point program includes commitments to “unlock home ownership” through new government funding, a plan to build more homes to address supply constraints and measures to establish and protect new rights for buyers.
“If you work hard, if you save, that dream of having your own place should be in reach. But for too many people, it just isn’t — and that’s not right,” Mr. Trudeau said.
“You shouldn’t have to move far away from your job or school or family to afford your rent. You shouldn’t lose a bidding war on your home to speculators. It’s time for things to change.”
Liberal Leader Justin Trudeau Promises to Double Tax Credits for First Home Buyers
If the Liberals are re-elected on September 20, Mr. Trudeau said, he would introduce a first home savings account which would allow Canadians up to age 40 to save $40,000 toward their first home and withdraw it tax-free when it comes time to buy. Money added to the account would go in tax-free and could be withdrawn without any taxes owing on possible investment gains.
He said a Liberal government would double the first-time home buyers tax credit from $5,000 to $10,000 — an incentive that would help with the many closing costs that come with buying property.
To reduce mortgage costs, a Trudeau-led government would force the Canada Mortgage and Housing Corporation to slash mortgage insurance rates by 25 per cent — a $6,100 savings for the average person. The Liberals are also proposing a sort of “rent-to-own” program, with $1 billion in new funding to “create a pathway for renters in five years or less.”
To help with the supply side of the equation, Mr. Trudeau promised to “build, preserve or repair 1.4 million homes in the next four years” by giving cities “new tools to speed up housing construction.” A re-elected Liberal government, he said, would create a $4 billion pool of cash that cities could tap if they help to create “middle-class homes.” The party believes this program — which would crack down on speculators owning vacant land — would make tens of thousands of new homes available in four years.
The party is also promising $2.7 billion over four years to build or repair more affordable homes, money to convert empty office space into housing, a “multigenerational home renovation tax credit” to offset the costs of adding a secondary unit to a home, and more money for Indigenous housing to help First Nations, Métis and Inuit people who live in substandard conditions.
‘Total price transparency’
Trudeau also promised to rein in abusive real estate practices that have made buying a home an unpleasant experience for many in recent years.
A new federal Home Buyers’ Bill of Rights would ban “blind bidding” — home buyers vying for the same property without knowing how much others are offering. It would establish a legal right to a home inspection, ensure “total price transparency” — so that a would-be buyer knows the history of recent house sale prices — require more disclosure from real estate agents who represent both the buyer and the seller, and demand that banks offer mortgage deferrals for six months to someone who’s lost their job.
Matching a promise made by the Conservatives, a Liberal government would also ban new foreign ownership of Canadian homes for the next two years — a measure meant to put the brakes on rampant housing speculation driven by offshore money.
The Liberals also would impose an “anti-flipping tax” on residential properties, which would require that properties either be held for at least 12 months or face burdensome taxes.
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