From the shortage of affordable housing to million-dollar single-family homes in the city, the housing crisis is now an inescapable reality for millions of Canadians.
To meet the nation’s growing housing demand, Finance Minister Chrystia Freeland will commit $4 billion over five years from 202-2023 to build 100,000 new homes.
This amount will be used primarily to accelerate the construction of housing through a
single and flexible application system which will not prevent municipalities or communities from accessing other available assistance programs.
Ottawa is also promising $1.5 billion over two years for the accelerated construction of 6,000 new affordable housing units for people who are homeless or at risk of becoming homeless.
Ottawa is also promising one-time assistance of $500 to people who have difficulty finding affordable housing. The terms of this $475 million measure, which should benefit more than 172,000 households in 2022-2023, will be announced at a later date.
Over $40,000 tax-free for first-time buyers
If it is difficult to find affordable housing, the same goes for houses and condominiums, the prices of which have literally skyrocketed in recent years, making it practically impossible to acquire a first property for a large number of buyers.
” When house prices go up, the cost of the down payment goes up too. This is a major hurdle for many looking to buy a home, especially for young people. »
To come to their aid, Minister Freeland announces a series of measures intended to support people who are saving to buy a first property, including an innovative measure that uses an already well-known savings lever: the free savings account tax credit, more commonly known as the TFSA.
Now, with this new kind of TFSA that Ottawa intends to set up, a person who saves to buy a first property will be able to contribute $8,000 per year, up to a maximum of $40,000.
Where the concept becomes interesting is that the sums invested will be tax deductible, as is currently the case with RRSPs. Even more interesting, all the money placed in this TFSA, including the investment income it will have generated, will not be taxable when the buyer withdraws it to proceed with the purchase of his first property.
The measure, valued at $725 million over five years, is due to come into effect in 2023.
A person who earns between $50,000 and $100,000 a year, who deposits $8,000 in their tax-free savings account for the purchase of a first property, would receive approximately $1,640 more in federal reimbursement each year thanks to the tax credit. If he deposits the maximum allowed amount of $8,000 in his TFSA each year, this person will have saved approximately $45,000 after five years, including the interest income generated by these sums.
However, when she withdraws this amount to make a down payment on a first property, she will not have to pay any tax on this additional income, as is currently the case with RRSPs or the RAP (Access Plan to the property). This person will therefore be able to save thousands of tax dollars that they can use to increase their down payment or invest in their new home.
The tax credit for a first home doubled
Still in the spirit of facilitating access to home ownership for first-time buyers, Minister Freeland is announcing that she is doubling the amount of the tax credit for the purchase of a first home to $10,000.
This decision will allow first-time buyers to receive up to $1,500 in tax refunds on the purchase of their first home.
The measure will also be retroactive to January 1, 2022.
For those renovating…
Ottawa is also doubling the limit on eligible expenses for the home accessibility tax credit, which is now $20,000.
People who must undertake work to make their home more accessible to disabled or aging people will be able to benefit from a tax credit of up to $3,000 on the cost of the renovations.
Families wishing to renovate an intergenerational home will be able to benefit from financial support of up to $7,500 starting in 2023.
for the construction of a secondary dwelling for an elderly person or an adult with a disability.
Ottawa intends to tighten the screw on buyers and sellers
But it’s not just gifts and promises of thousands of new homes in Chyrstia Freeland’s budget. The Minister of Finance also intends to tackle the real estate overheating by acting on the behavior of sellers as well as buyers.
As a first step, Ottawa intends to introduce new rules to calm real estate speculation by imposing
fully and fairly profits made on resale
hasty of a property.
As a result,
anyone selling a property they have held for less than 12 months would be subject to full taxation of their profits as business incomereads the budget, which specifies that the measure will apply to residential properties sold on or after January 1, 2023.
As for buyers, Ottawa plans to create, in collaboration with the provinces and territories, a buyer’s bill of rights and a national plan to end blind bidding, which prevents potential buyers from knowing the offers of others. buyers.
This charter could also include the assurance of a legal right to a pre-purchase property inspection and access to historical selling prices in title searches.
Still in an effort to curb real estate speculation, Ottawa also plans to ban foreign commercial companies from buying residential properties for a two-year period.
non-recreational in Canada. People who do not have Canadian citizenship or permanent residency would also be subject to this measure.
According to Statistics Canada, the share of properties owned by non-residents in Canada fluctuated between 2% and 5% in 2017, depending on cities and regions.