Not much changed following last month's federal election. However, the governing Liberals now have an opportunity to delivery a fresh slate of housing policies designed to create stability and assist first-time home buyers in the marketplace.
If implemented, some of these policies could impact potential future home buyers. I've summarized the government's key housing promises below:
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 is proven to be for future employment or immigration within the proceeding two years
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 (CHMC), 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 $6100
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 The money could be withdrawn tax-free, with no requirement to repay it, and used to purchase a first home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 $5000
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 a major life event
ensure transparency on the history of recent home sale prices
establish a legal right to a home inspection
There's no doubt that the government has its work cut out if it wants to move forward with all the above proposals - especially given a minority government status.
And what ultimately ends up as law could be quite different from what was proposed during an election.
We'll be monitoring the developments closely and will update you if any policy changes are announced, but if you have any questions about any of the proposed policies and their potential implications on your future home-buying plans, let's chat!