Trudeau promises new multi-billion dollar incentives and ‘rollover’ tax to help Canadians buy homes

Liberal Leader Justin Trudeau today pledged a series of new measures to help Canadians buy homes at a time when a scorching housing market has made home ownership a distant dream for many young people.

Speaking to reporters in Hamilton, Trudeau said the real estate market was plagued by “instability” and “uncertainty” and a COVID-fueled spike led to price spikes, bid wars , rampant speculation and too many vacant properties. He said the situation demands government intervention to help more people acquire their own homes.

The aggressive plan – billions of dollars in new financing, measures to curb the practice of “flipping” homes, efforts to prevent foreign nationals from buying homes for two years, and new regulatory measures to control real estate agents exploiters – comes at a time when Canadians are telling pollsters that housing is one of the issues they care most about.

The three-point agenda includes commitments to ‘unlock homeownership’ through new government funding, a plan to build more homes to deal with supply constraints, and measures to establish and protect new homes. rights for buyers.

“If you work hard, if you save money, this dream of having your own home should be within your reach. But for too many people, it just isn’t – and it’s not fair,” he said. Trudeau said.

“You shouldn’t have to move far from your job, school, or family to pay your rent. You shouldn’t lose a bidding war on your home to speculators. It’s time for a change. “

A promise of a double tax credit

If the Liberals are re-elected on Sept. 20, Trudeau said, he would introduce a first home ownership savings account that would allow Canadians up to 40 years of age to save $ 40,000 on their first home and withdraw it duty-free from tax at the time of purchase. The money added to the account would be tax free and could be withdrawn without any tax owed on possible investment gains.

He said a Liberal government would double the first-time homebuyer’s tax credit from $ 5,000 to $ 10,000 – an incentive that would help cover the many closing costs associated with buying a home. a property.

To cut mortgage costs, a government led by Trudeau would force the Canada Mortgage and Housing Corporation to cut mortgage insurance rates by 25%, saving the average person $ 6,100. The Liberals are also proposing a sort of “lease-to-buy” program, with $ 1 billion in new funding to “create a path for tenants in five years or less.”

To help on the supply side of the equation, Trudeau pledged to “build, preserve or repair 1.4 million homes over the next four years” by giving cities “new tools to speed up housing construction. “. A reelected Liberal government, he said, would create a $ 4 billion pool of money that cities could tap into if they helped create “middle class homes.” The party estimates that this program – which would crack down on speculators who own vacant land – would free up tens of thousands of new homes in four years.

The party is also pledging $ 2.7 billion over four years to build or repair more affordable homes, money to convert empty offices into housing, a “multigenerational home improvement tax credit” to offset costs. adding a secondary unit to a house, and more. money for aboriginal housing to help First Nations, Métis and Inuit living in unsanitary conditions.

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“Total price transparency”

Trudeau also pledged to curb the abusive real estate practices that have made buying a home an unpleasant experience for many in recent years.

A new Federal Homebuyers Bill of Rights would ban “blind auctions” – homebuyers competing for the same property without knowing how much others are bidding. This would establish a legal right to a home inspection, ensure “full price transparency” – so that a potential buyer knows the selling price history of recent homes – would require more disclosure from real estate agents who represent both buyer and seller, and require banks to offer mortgage deferrals for six months to someone who has lost their job.

Much of what the Liberals are proposing in this Bill of Rights goes beyond the traditional limits of federal responsibility. According to the constitutional division of powers, property and civil rights and “all matters of a purely local or private nature” are considered to be within provincial jurisdiction.

A Liberal campaign official, speaking on the merits, said some of the proposed measures, such as banning blind auctions, could be enforced through new penalties under the Criminal Code.

The Liberals could also use the federal government’s taxing powers and mortgage underwriting authority to push through changes. Some of the other promises would require negotiations.

“The Criminal Code is a vehicle through which the federal government could act on these things,” the official said. “But we have our eyes open to the fact that there will have to be meetings with the provinces, work with the provinces, but there is a lot of room for federal leadership.”

The Canadian Real Estate Association, which represents some 135,000 real estate agents, was quick to criticize the Liberal plan, which the group said amounts to “criminalizing the way Canadians sell their homes.”

Rather, the association argues that the lack of supply is at the root of housing problems in Canada.

“Canadians have a right to choose how they want to make what is possibly the biggest purchase of their life. The proposed blind auction ban removes the ability for Canadian homeowners to sell their homes as they see fit.” the ACI said in a press release. .

In keeping with a promise made by the Conservatives, a Liberal government would also ban new foreign ownership of Canadian homes for the next two years – a move meant to curb rampant money-driven real estate speculation overseas.

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 vacant land owned by foreigners in large urban areas.

The Liberals would also impose an “anti-rollover tax” on residential properties, which would require properties to be held for at least 12 months or be subject to heavy taxes.

When asked today if the new measures amounted to an admission that the existing national housing strategy had failed to deliver on its promises, Trudeau said while the government’s 2017 plan helped expand the basin affordable housing for thousands of people and reducing the number of chronically homeless people, it is clear that more needs to be done.

WATCH | Trudeau promises help to homebuyers:

Liberal leader pledges help to homebuyers

Justin Trudeau made the announcement Tuesday during a stop in Hamilton, Ont. 1:54

“Let us remember that in 2017, as we launched this national housing strategy, we were starting from a starting point, because over the last ten years a Conservative government decided that the federal government had no role to play in housing. This is wrong, ”Trudeau said. “But absolutely, there is more to do – a lot more to do.”

Trudeau took a hit at Conservative leader Erin O’Toole’s housing plan, which pledges to build a million new homes over three years while easing mortgage requirements and making more federal land available for development.

Trudeau said the Conservatives would “do what they always do, give the greatest benefits to the richest” – a reference to the O’Toole platform’s commitment to create incentives for Canadians who invest in the rental housing by changing the capital gains tax regime.

The Conservatives maintain that the housing “crisis” is caused by a shortage of supply and say programs that encourage individuals and businesses to build more rental housing will help alleviate the problem.

“Erin O’Toole would give your landlord a tax break on the sale of the building and not do anything for you. At the end of the day, it’s all about you,” Trudeau said.

“We can’t afford Erin O’Toole’s approach to housing, just like we can’t afford his plan to tear up our pledge on $ 10 a day child care or immunizations. “

Conservatives, NDP say Liberal housing policy has failed

Speaking to reporters in Ottawa, O’Toole said he would not take any lessons from Trudeau on housing.

“Mr. Trudeau turned six and failed. The housing crisis has exploded in the last three or four years under his leadership,” O’Toole said. “After six years of inaction, more empty words today are not what Canadians deserve. They deserve a plan.”

Equally critical was NDP Leader Jagmeet Singh, saying the situation has only worsened in the past six years under Trudeau.

“Housing has become more expensive. Renting has become more expensive. We can’t handle this for another four years, ”Singh said during a campaign stop in Mississauga, Ont., Where he announced a plan to nationalize Revera, the nation’s largest nursing home operator. long-term for-profit.

The NDP housing platform is tenant driven. The party argues that the Liberals “neglected” Canadians who do not own homes and that existing programs are “too small to make a real difference to most Canadians.”

NDP government would streamline funding requests for housing co-ops, social housing and non-profit housing while waiving the federal portion of the GST / HST on the construction of new affordable rental housing in order to increase the offer. Singh said a government led by him would free up federal land for these kinds of projects, turning unused and underutilized properties into “vibrant new communities.”

For homebuyers, the NDP would reintroduce 30-year terms for insured mortgages on entry-level homes. Like the Liberals, the NDP would also double the Home Buyer’s Tax Credit to give people about $ 1,500 to help pay for closing costs. They also promise to impose a 20 percent foreign buyers tax on homes sold to people who are not Canadian citizens or permanent residents.

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