On Tuesday, while campaigning in Hamilton, Liberal leader Justin Trudeau announced an aggressive, three-part housing plan which includes building more homes, providing a Buyers Tax Credit, and introducing a Home Buyers’ Bill of Rights.
Trudeau's announcement comes amid a red-hot housing market that has made owning property seem like a distant dream for many Canadians -- especially young people.
"We’re moving forward with a plan to put home ownership back within reach and make buying your first home easier, fairer, and more affordable," said Trudeau.
According to the Liberals, if re-elected on September 20, the party's three-part housing plan will:
- Unlock Home Ownership: Liberals will help save a family buying their first home up to $30,000 through new government funding.
- Build More Homes: Liberals will build, preserve, or repair an additional 1.4 million homes in four years to address supply constraints.
- Protect Your Rights: Liberals will create a Home Buyers’ Bill of Rights to make the process of buying a home fairer, more open, and transparent.
READ: The Conservatives: How They Plan to Tackle Housing if Elected
READ: The NDP: How They Plan to Tackle Housing if Elected
Unlock Home Ownership
To help Canadians save for their down payment faster, the Liberals say they will introduce a rent-to-own program, double the Home Buyers Tax Credit, and create a tax-free First Home Savings Account.
The Liberals say their plan would help young Canadians afford a down payment faster by introducing a tax-free First Home Savings Account that would allow Canadians under 40 to save up to $40,000 toward their first home and withdraw it tax-free to put toward their purchase, with no requirement to repay it.
He said a Liberal government would double the first-time homebuyers tax credit from $5,000 to $10,000 — an incentive that would help buyers with the many closing costs that come with buying property.
To reduce mortgage costs, a Liberal-led government would force the Canada Mortgage and Housing Corporation to reduce mortgage insurance rates by 25% — a $6,100 savings for the average person. The Liberals are also proposing a sort of "rent-to-own" program, with $1 billion in loans and grants to help make it easier for renters to get on the path towards homeownership while renting.
Build More Homes
To help with supply, Trudeau said the Liberals plan to build, preserve, or repair 1.4 million affordable homes in four years. The Liberals' housing plan also includes a Housing Accelerator Fund, which would make $4 billion available to help large cities speed up their housing plans, targeting 100,000 new middle-class homes by 2024-2025.
The party also promised $2.7 billion over four years to build or repair more affordable homes, money to convert empty office space into housing, a multigenerational home renovation tax credit to offset the costs of adding a secondary unit to a home, and more money for Indigenous housing to help First Nations, Métis, and Inuit people who live in substandard conditions.
Additionally, as outlined in Budget 2021, a re-elected Liberal government would move forward with a $567 million investment -- in addition to $2.2 billion previously committed -- to support communities in an effort to end chronic homelessness across the country.
Protect Your Rights
For those ready to buy, Trudeau said the Liberals would "make sure the process is fair and transparent" by creating a Home Buyers’ Bill of Rights to stop blind bidding, pause new foreign ownership, and more.
As part of the Buyers' Bill of Rights, blind bidding -- which occurs when multiple buyers trying to purchase the same property aren't aware of what others are offering -- would be banned.
The Bill of Rights would also include:
- A legal right to a home inspection that ensures "total price transparency" on the history of recent house sale prices on title searches;
- Require real-estate agents to disclose to all participants in a transaction when they are involved in both sides of a potential sale;
- Move forward with a publicly accessible beneficial ownership registry;
- Ensure banks and lenders offer mortgage deferrals for up to six months in the event of job loss or other major life events;
- Require mortgage lenders to act in your best interest so that you're fully informed of the full range of choices at your disposal, including the First-Time Home Buyer Incentive.
Just like a promise made by the Conservatives, a Liberal government would also temporarily ban new foreign ownership of Canadian homes for the next two years — a measure meant to help stabilize the housing market coming out of COVID-19.
In addition to the ban, Trudeau said he would expand the upcoming tax on vacant and underused housing owned by non-resident and non-Canadians to include foreign-owned vacant land within large urban areas.
The Liberals would also impose an "anti-flipping tax" on residential properties, which would require that properties either be held for at least 12 months or face taxes -- a move intended to reduce speculative demand in the marketplace and help cool excessive price growth.
The Liberals say they will also review the tax treatment of large corporate owners of residential properties such as Real Estate Investment Trusts (REITs) who are increasingly trying to amass large portfolios of Canadian rental housing, putting upward pressure on rents.
Additionally, if re-elected, the party says it will establish the Canada Financial Crimes Agency, which will serve as Canada's first-ever national law enforcement agency solely dedicated to investigating and combatting all forms of major financial crime, including the presence of money laundering in the housing market.
