When you dig deeper into the “mini-budget” that the Federal Government unveiled last week, you’ll find a section called “Making Housing More Affordable” that didn’t get a lot of attention in the media.
In it the Government says it is “moving forward with its ambitious package of measures to build more homes and make housing more affordable.”
Some measures — like a two-year ban on non-Canadians’ purchasing residential property — were introduced in June. Last week’s mini budget came with more measures that it plans to table in Parliament.
Here they are:
1. Creation of a Tax-Free First Home Savings Account. Prospective first-time home buyers could save up to $40,000, tax-free. Like an RRSP, contributions would be tax-deductible, and withdrawals to purchase a first home — including investment income — would be non-taxable, like a TFSA. Tax-free in; tax-free out. Anticipated start date: mid-2023.
2. Doubling the First-Time Home Buyers' Tax Credit, which would provide up to $1,500 in direct support to home buyers, to help offset increasing closing costs involved in buying a home. Anticipated start date: before the end of 2022.
3. A new, refundable Multigenerational Home Renovation Tax Credit, which would provide up to $7,500 in support for constructing a secondary suite for a family member who is a senior or an adult with a disability. Anticipated start date: January 1, 2023.
4. Taxing profits from flipping properties held for less than 12 months, with certain exceptions for unexpected life events. The intention is for investors who flip homes to pay their fair share, and play a role in lowering housing prices for Canadians. This was announced previously. Anticipated start date: 2023.
Like everything else connected to building more opens, it’s going to take time. As the cliche goes "Rome wasn’t built in a day…”
Neither are homes.