Here are the main notable points of the federal government announcement on the budget as it pertains to housing.
1. First-time homebuyers tax savings account
This account allows you to save up to $8,000 dollars a year for a maximum of $40,000 tax-free, and you also have the ability to invest it within. The investment income will also not be taxable. When you withdraw the money to buy your first home, you will be able to do so tax-free. This initiative is great, however, I wish it had a larger contribution room.
2. Homebuyers’ bill of rights
Three main components are considered in the forthcoming bill of rights.
– Ending blind bidding: the intent is to end uyers will be able to see other purchasers’ offer details on a particular property.
– Transparency around sold prices: Land registry records at the moment doesn’t always reflect the actual purchase price of a property. There are ways around supressing values. The goal is to end these practices, so that individuals would always have access to the correct historical sales data.
– Homebuyers’ legal right to home inspection. Right now buyers have the option to include a home inspection clause in an Agreement of Purchase of Sale. However, in a bidding situation, having a condition can put the buyer at a major disadvantage. The intent of the government is to mandate sellers to always allow a home inspection.
3. Taxing home flippers
The government is proposing indiviuals to pay income tax on any capital gains on a property that is purchased and sold within a 12 month period, with a few exceptions.
4. Taxing assignments
Purchasers of pre-construction properties will be subject to hst on if they decide to assign their contract prior to final closing. Previously this only applied to investor buyers, and not those who bought with the intention of living in the unit.
The government is also planning on putting measures in place around large corporations amassing large residential real estate portfolios to rent out. This is to protect smaller landlords, and once again to avoid driving up the prices of properties. The government also is allocating some money towards rent-to-own programs, and towards affordable housing.
Some of these measures may prove to be effective in the long run, however, I believe we still need to address the supply side of the housing. We need to cut red tape, in order to be able to build faster and more efficiently. We should make the rezoning process more streamlined so that underutilized pieces of land can be used to build affordable housing, and homes for first-time homebuyers.