Liberal leader Justin Trudeau today promised a series of new initiatives to help Canadians buy a house at a time when a red-hot housing market has made property rights seem like a distant dream to many young people.
Trudeau told reporters in Hamilton, Ont., That the real estate market has been hit by “instability” and “uncertainty,” and a COVID-driven rise has led to soaring prices, bidding wars, violent speculation and too many vacant properties. He said the situation calls for government intervention to help more people acquire their own homes.
The aggressive plan – billions of dollars in new funding, a temporary ban on “returning” home, efforts to block foreign nationals from buying homes for two years and new legislative measures for police for real estate brokers – come at a time when Canadians tell researchers that housing is one of the issues they worry about the most.
The three-point program includes commitments to “unlock home ownership” through new state 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 and you save, the dream of having your own place should be within reach. But for many people, it just isn’t – and it’s not true,” Trudeau said.
“You should not have to move far away from your job or school or family to afford your rent. You should not lose a bidding war on your home to speculators. It is time for things to change.”
A promise of double tax deduction
If the Liberals are re-elected on Sept. 20, Trudeau said, he would introduce a first home savings account that would allow Canadians up to the age of 40 to save $ 40,000 toward their first home and withdraw it tax-free when it’s time to buy. Money added to the account would go tax-free and could be withdrawn without any tax due to possible investment gains.
He said a liberal government would double first-time buyers’ tax deductions 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 Canada Mortgage and Housing Corporation to lower mortgage rates by 25 percent — a $ 6,100 saving for the average person. The Liberals are also proposing a kind of “rent-to-own” program with $ 1 billion in new funding to “create a path for tenants in five years or less.”
To help with the supply side of the equation, Trudeau promised to “build, preserve or repair 1.4 million homes over the next four years” by providing cities with “new tools to accelerate housing construction.” A re-elected liberal government, he said, would create a $ 4 billion pool of cash that cities could tap into if they helped create “middle-class housing.” The party believes that this program – which would crack down on speculators who own land – would make tens of thousands of new homes available in four years.
The party also pledges $ 2.7 billion over four years to build or repair more affordable housing, money to convert empty office space into housing, a “multigenerational tax deduction for home renovation” to offset the cost of adding a secondary unit to a homes and more money for native housing to help First Nations, Métis and Inuit people living in poor conditions.
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‘Total price transparency’
Trudeau also promised to crack down on real estate abuse, which has made buying a home an unpleasant experience for many in recent years.
A new federal homebuyer’s bill would ban “blind bids” – homebuyers 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 a prospective buyer knows the history of recent home sales prices – require more information from real estate agents representing both buyer and seller, and require banks to offer deferral of mortgages for six months to someone who has lost their job.
Consistent with a promise from the Conservatives, a liberal government would also ban new foreign ownership of Canadian homes for the next two years – a measure that would put the brakes on violent housing speculation driven by offshore money.
In addition to the ban, Trudeau said he would expand the upcoming tax on vacant housing owned by non-residents and non-Canadians to include foreign-owned land in large urban areas.
The Liberals would also impose an “anti-flipping tax” on residential properties, which would require properties to either be kept for at least 12 months or face burdensome taxes.
Asked today whether the new measures correspond to an admission that the existing national housing strategy has not delivered as promised, Trudeau said that while government 2017 plan helped expand the pool of affordable housing for thousands of people and cut back on chronic homelessness, it is obvious that more needs to be done.
SE: Trudeau promises help to home buyers
‘Much more to do’
“Let’s remember, in 2017, when we launched the National Housing Strategy, we started from a standing start because in the previous ten years, a Conservative government decided that the federal government had no role to play in housing. It is wrong, said Trudeau. “But absolutely, there is more to do – much more to do.”
Trudeau took a hit against Conservative leader Erin O’Toole housing plan, which is committed to building one million new homes over three years, while easing mortgage requirements and making more federal land available for development.
Trudeau said the Conservatives will “do what they always do, give the biggest rich the biggest breaks” – a reference to O’Toole’s platform commitment to create incentives for Canadians investing in rental housing by making adjustments to the capital gains tax regime.
“Erin O’Toole would give your landlord a tax break by selling the building and doing nothing for you. Ultimately, it’s about you,” Trudeau said.
“We can not afford Erin O’Toole’s approach to housing, nor can we afford his plan to tear down our $ 10 a day childcare commitment or vaccinations.”
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