Tax credit and savings account will make homes more affordable, says federal finance minister
Federal Finance Minister Chrystia Freeland took the opportunity on Wednesday to remind Canadians of several measures aimed at making housing more affordable for young people in British Columbia and across the country.
Freeland made the announcements at the unveiling of a new modular housing project in Surrey, B.C., where she said “housing is a basic human need and we need to make sure everyone in Canada has a at home”.
The new project will contain 44 units and will be intended for women experiencing or at risk of homelessness.
As previously announced in the budget last week, Freeland said the Canadian government is doubling the first-time homebuyer tax credit to $10,000, which will apply to homes purchased on or after January 1. The first-time home buyer incentive is also extended through March 31, 2025, Freeland added.
In addition, a tax-free First Home Savings Account would allow first-time home buyers to contribute up to $40,000 and first-time home buyer withdrawals would be tax-free.
The government is also imposing a two-year ban on foreign capital entering Canada to buy residential real estate, including ensuring real estate investors pay their fair share of taxes and working to present a national plan. to end blind bidding.
“We need affordable housing for everyone, and that means we must take significant steps to ensure that an entire generation of Canadians is not deprived of affordability,” Freeland said.
“Budget 2022 represents the most ambitious plan Canada has ever had to address this fundamental challenge.
Federal politicians squabble over housing affordability in British Columbia
She acknowledged that the biggest problem facing Canadians is housing supply and that it is not a problem that will be solved tomorrow.
Should you rent or buy a house? Why this calculation might change
Omicron XE variant: Here’s what we know about this COVID hybrid strain
For those who want to live in a multi-generational home, they will now be able to claim a home renovation tax credit that would provide up to $7,500 to build a secondary suite in the home.
The budget promised $1.5 billion in funding for the Rapid Housing Initiative, which helps build homes quickly for vulnerable people. At least a quarter of this sum is earmarked for women-focused projects.
The Liberal budget also announced more than $10 billion in funding to speed up home construction and repair, as well as measures to calm the market and help those trying to buy their first home.
But advocates say that while the focus on housing affordability in the federal budget shows promise, its measures could go further to help those most in need.
Federal budget needs more targeted housing support, advocates say
A report released last month by the Union of British Columbia Municipalities (UBCM) found that while BC’s housing inventory keeps pace with population growth, many of these new homes remain inaccessible.
The report shows that the population of the province grew by 7.6% while the number of dwellings increased by 7.2% between 2016 and 2021.
In some major cities, including Vancouver, Kelowna and Victoria, the supply of new housing has actually exceeded local population growth, according to the report.
Still, UBCM said investor-focused real estate practices and pre-sale reversal, among other practices, have continued to drive up home prices, making it difficult for first-time buyers to enter the market. specifically.
The province has recognized the need to increase housing supply and has even floated the idea of bypassing municipalities to speed up the pace of new development approvals.
Legislation was also introduced last month for a ‘cooling off period’ to end so-called blind auctions on home purchases. But industry officials have raised concerns that the move would simply put sellers at greater risk and do little to address the market as a whole.
British Columbia’s Response to Federal Budget Housing Investments
— with files from Sean Boynton and The Canadian Press
© 2022 Global News, a division of Corus Entertainment Inc.