December 19 2022
With the election around the corner, it’s safe to say that housing affordability is top of mind for many Canadians right now. From rising prices and increased competition to limited supply across many provinces, it’s important for Canadians to understand how their vote will impact Canada's housing market now and into the future. To get you prepared for the upcoming election, here’s an overview of what each federal party has proposed.
The Conservative party has expressed the need to build enough housing “not just to keep up with demand but to get ahead of population growth.” In an effort to do this, they have proposed to build one million homes in the next three years to give all Canadians a chance to achieve homeownership. The party also plans to build public transit infrastructure that connects to neighbouring cities and encourages municipalities to increase density nearby federally-funded transit projects. The Conservatives also propose to ban foreign investors from buying residential properties in Canada for at least two years, as well as incentivize developers by enabling them to defer capital gains tax when selling a rental property and reinvesting in rental housing.
Specifically for first-time home buyers, the Conservative party wants to develop more incentives centered around helping them reach their homeownership goals quicker and easier. In addition, the party wants to encourage the offering of seven to 10-year mortgages, while also making adjustments to stress test rules and insurance requirements to make it a little easier for Canadians to qualify for a mortgage. The Conservatives have also announced that they will introduce a “For Indigenous, By Indigenous” housing program that will empower Indigenous communities with the resources to meet their housing needs. This includes A Northern Housing strategy to provide territories with federal housing funding, investing $325 million over the next three years to create 1,000 residential drug treatment beds and developing 50 recovery centres nationwide.
On August 24, 2021, Justin Trudeau promised a combination of measures designed to help Canadians purchase a home despite the red-hot housing market we’re currently in. With soaring prices and bidding wars all in the mix of a pandemic, the Liberal party proposed an aggressive plan that incorporates billions of dollars to fund the development of affordable housing, with measures to curb the practice of flipping homes and block foreign nationals from buying homes for two years. In addition, the party has shared their plan to create a tax-free ‘First Home Savings Account’ allowing Canadians under the age of 40 to save up to $40,000 and withdraw it tax-free to put toward a home purchase.
To reduce mortgage costs, the Liberal party also mentioned that they plan to encourage the Canada Mortgage and Housing Corporation (CMHC) to lower mortgage insurance rates by 25 per cent ($6,100 savings for the average person). The party also expressed ideas for a "rent-to-own" program, with $1 billion in new funding to develop an easier pathway for renters to become buyers in five years or less. The Liberals have also announced they will work with Indigenous partners to co-develop an Urban, Rural and Northern Indigenous Housing Strategy to end homelessness and improve these communities.
New Democratic Party (NDP), Jagmeet Singh
The NDP has proposed an initiative to build at least 500,000 affordable homes over the next 10 years and turn underutilized properties into housing. They have also expressed plans for a 20 percent foreign buyers’ tax on the sale of homes to non-Canadian citizens or those who are not permanent residents. In order to help buyers get into the market, the NDP has suggested creating 30-year mortgages insured by the CMHC, which will allow for smaller monthly payments, freeing up funds for other household expenses. As well, they plan to assist homeowners with closing costs by doubling the Home Buyer’s Tax Credit to $1,500.
In addition, the NDP stated that they wish to waive the federal portion of the GST/HST on the construction of new affordable rental units with the intention of having new units built faster and keeping them affordable for the long term. For those who are open to innovative paths to home ownership, the NDP plans to provide resources to facilitate co-housing (such as model co-ownership agreements and connections to local resources) and ease access to financing by offering CMHC-backed co-ownership mortgages. The NDP has also expressed their plans to support Indigenous communities by implementing a fully-funded National Housing Strategy within the first 100 days of office.
The Green Party, Annamie Paul
The Green party has introduced a roadmap that incorporates an affordable housing strategy, with a focus on building connected, affordable and sustainable communities. They plan to build 100,000 affordable units on the basis that all Canadians deserve to live in a community that is close to family and friends, provides work opportunities and gives equitable access to parks, services and local businesses.
Additionally, they set out to revamp and modernize existing residential buildings to acquire more sustainable amenities. The Green party plans to expand the opportunity of homeownership and ensure that people can live in communities that best suit their lifestyle and budget. As well, the party explains they will restore tax incentives for building purpose-built rental housing, provide tax credits for gifts of land, allocate one per cent of GST to housing and remove GST when developers list an empty rental unit condo on the market. They have also stated their intention to build 22,000 Indigenous-owned and operated permanent homes under an Urban and Rural Indigenous Housing Strategy led by Indigenous communities.
As we move closer to the election on September 20, it’s important to understand where each party stands as it relates to the Canadian housing market, especially if you plan to purchase a home in the next four years. Just like any important decision, being aware of all of the key details involved will allow you to vote with confidence.
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