The housing crisis is uppermost in voters’ minds and the Trudeau-led Liberals are attempting to cash in on it with their plan to make residential real estate more affordable.
A re-elected Trudeau government would ban foreigners from buying Canadian homes for the next two years, introduce a rent-to-own scheme and make house purchases more transparent to address rapid price gains, the Liberal Party of Canada leader said on Tuesday.
Justin Trudeau also promised to build more homes to solve the problem.
“Owning a home shouldn’t be out of reach and renting shouldn’t be so expensive for young Canadians,” Trudeau said during a campaign stop in Hamilton. “They shouldn’t be losing bidding wars when they see houses sitting empty next door. Or having to move hundreds of kilometers away from their communities just to pay their rent. They deserve the same opportunities of owning a home, just like past generations – and we have the plan to make it happen.”
If re-elected, the Liberal government will move forward with a three-part housing plan, the first of which proposes to save a family buying their first home up to $30,000. A rent-to-own scheme with $1 billion in new funding is expected to “create a pathway for renters in five years or less”.
Trudeau said he would introduce a first home savings account which would allow Canadians up to age 40 to save $40,000 toward their first home and withdraw it tax-free when the time comes to buy. Money added to the account would go in tax-free and could be withdrawn without any taxes owing on possible investment gains.
He also promised that a Liberal government would double the first-time home buyers tax credit from $5,000 to $10,000 — an incentive that would help with the many closing costs that come with buying property.
“If you work hard, if you save, that dream of having your own place should be in reach,” said Trudeau.
The Liberals vowed to reduce the monthly costs of mortgages to help young Canadians buy their first home sooner.
To reduce mortgage costs, a Trudeau-led government would force the Canada Mortgage and Housing Corporation to slash mortgage insurance rates by 25 per cent — a $6,100 savings for the average person.
Trudeau stated that a re-elected Liberal government will build, preserve, or repair 1.4 million homes in four years to help increase the supply of homes available to Canadians, create jobs, and grow the middle class.
A Housing Accelerator Fund, which would make $4 billion available to help large cities speed up their housing plans, with a target of 100,000 new middle-class homes by 2024-25.
The Liberals plan to create a Home Buyers’ Bill of Rights to make the process of buying a home fairer, more open and transparent, and ensure homes are for people and families.
Their ‘A Home For Everyone’ plan also proposes to ban blind bidding and establish a legal right to a home inspection, and banning new foreign ownership for two years.
“We’ll crack down on predatory speculators that stack the deck against you. So no more blind bidding,” said Trudeau.
In addition to banning new foreign ownership of Canadian homes for two years, the federal Liberals pledged to expand an existing tax on foreign-owned vacant housing and establish an anti-flipping tax that would kick in on residential properties sold within 12 months of purchase.
Canadian home prices have jumped 15.6% in the last year and the Canadian Real Estate Association’s home price index is up 69.7% since November 2015, when Trudeau first took office. Many Canadian housing markets have cooled from the peak of the pandemic-driven buying frenzy, but thousands of would-be buyers now need far more to afford down payments.
NDP Leader Jagmeet Singh said, “Justin Trudeau has said the right things about housing for six years. Instead of acting, he has let speculators and big developers off the hook while rent and housing prices skyrocket. Canadians struggling with Trudeau’s housing crisis just can’t afford his empty promises anymore.”
“If he really wanted to make housing more affordable for people, he’d have done it already,” added Singh.
Last week Conservative leader Erin O’Toole also pledged to build a million homes over three years, while promising that his government would ban non-resident foreigners from buying Canadian properties for at least two years.