With affordable housing out of reach for most first time home buyers. We turn to the Canada’s federal election in hopes to find a solution to this problem.
Here is a little outline on what each party is trying to implement:
- Propose changing mortgage stress tests for first-time homebuyers and reviewing the removal of the test from mortgage renewals
- Increasing amortization periods on insured mortgages to 30 years for first-time buyers
- Making federal real estate available for housing developments
- Introduce federal speculation tax on non-residents and a higher cap on the First-Time Home Buyer Incentive, which was implemented in early September.
- Increased the amount first-time buyers can withdraw from their RRSPs to $35,000 from $25,000 in budget 2019.
- Create 500,000 affordable housing units
- Re-introduce 30-year terms for insured mortgages for first-time homebuyers
- Double the first-time homebuyers’ tax credit to $1,500
- Implement a 15 per cent foreign buyers' tax on purchases of residential property by foreign corporations or people who are not citizens or permanent residents
- Appoint a Minister of Housing to strengthen the National Housing Strategy so it meets the needs of affordable housing in each province
- Eliminate the first-time home buyer incentive recently implemented by the Liberals
- Restore tax incentives for building purpose-built rental housing and provide tax credits for gifts of lands to community land trusts to provide affordable housing
- Refocus the Canada Mortgage and Housing Corporation’s mandate on supporting the development of affordable, non-market and cooperative housing, as opposed to one of its primary activities of providing mortgage loan insurance
Indeed, proposals like increasing 30 year amortization and the newly introduced First Time Home Buyer Incentive program by the Liberals, will help in making housing more affordable but we may find ourselves in the same predicament. As you make it more affordable to purchase a home, then you will also see an increase in the demand for these homes causing the prices to increase. This is making most experts push for government to free up land for development, which will help to increase supply and more affordable housing.
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