Housing is a major concern for any government, but particularly in Canada, where in some cities, we have some of the highest house prices in the world. Not only does this make buying a home a much more difficult goal for many ordinary Canadians, but it also creates a housing bubble, which could cause serious economic problems if it were to burst suddenly. The government of Canada has been working to solve the housing problem for a while, and recently, they announced several new initiatives and programs that are designed to do just that in the 2022 budget. Unfortunately, they are not active yet, as they were proposed changes in the 2022 budget, but we want to ensure you are aware of these potential changes that could be coming within this year. Here’s what you need to know.
Housing Accelerator Fund
In order to accelerate the building and availability of housing, the government has committed $4 billion for the next five years, to fund various housing programs in cities around the country.
Tax-Free Savings Account
The government has also created a new tax-free housing savings account, which lets individuals save up to $40,000 towards purchasing a home. Like RRSPs, these contributions are tax-deductible, but withdrawals are also tax-free. This means this is a great way to save for your home’s down payment!
Extending the First-Time Home Buyer’s Benefit
Canada already has a program to help first-time home buyers get into the property market, but the government will expand that program too. It will be more accessible to more people, and it will be in place until at least 2025.
Foreign Investment Ban
One of the biggest problems in cities like Vancouver and Toronto has been foreign investors buying up property, and often, using them for short-term rentals or not renting them at all. This has been driving real estate prices up, while at the same time taking potential rental stock off the market. The current foreign investment ban will be in place for the next two years.
Updated Taxes for Flippers
Until now, various loopholes have allowed property flippers to pay less tax when they sell the properties they buy. New rules will increase the taxes paid by anyone who owns a property for less than 12 months, which will make flipping a less attractive way to make money.
More Rent to Own
Many Canadians aren’t buying homes because they can’t qualify for a mortgage. However, they’re also renting properties at the same time – and often paying more than they would for a mortgage! New support for rent-to-own scenarios will give rent-to-own options and other innovative home ownership projects up to $200 million over the next few years.
And Many More
The government of Canada’s most recent budget has many different funds, platforms, and programs that are designed to get more Canadian families into safe, affordable housing. Even though the items above are still in planning, we could start seeing implementations over the next year. Whether it’s building more homes, making them more attainable for local buyers, or creating new ways to buy homes, there’s a lot to work through, but it’s all good news for ordinary families. The best way to make sure that you are making the most of all the options out there is to speak to a skilled mortgage broker at Mortgage Design Group. Our mortgage brokers can help you determine all your options when it comes to buying a home. Contact us today!