The Canadian government is trying to stabilize the real estate market

The Canadian government is trying to stabilize the real estate market

The 2022 budget devotes a lot of attention to this issue.

The federal government has announced plans for public support for affordable housing in Canada. They include:

  • helping Canadians buy their first home;
  • providing housing for representatives of vulnerable groups of the population;
  • doubling the volume of housing construction in the next 10 years;
  • protection of buyers and tenants;
  • the fight against speculation in the real estate market.

First of all, immigrants are affected by the ban on the purchase of housing by foreigners. For two years, Canada prohibits foreigners who are not permanent residents or citizens of Canada from purchasing a home. The exception is for vacation properties.

But for those who plan to become permanent residents of Canada, the innovations look quite positive, because not all Canadians can now afford to take a mortgage or even rent an apartment in a big city.

To help young people buy their own homes, the government intends to introduce tax-free savings accounts for the purchase of their first home. This will save people up to $40,000 CAD. There will also be programs to reduce the cost of mortgages for first-time home buyers, and the tax credit for these buyers will be doubled to $10,000 CAD.

The government plans to invest $4 billion CAD in a new Housing Acceleration Fund over five years. The fund will monitor the housing market in different regions in order to offer developers timely assistance. In Canada, it is common practice for the government to invest in housing at the foundation stage, with the expectation that some of the apartments in the house will be municipal.

The $1.5 billion CAD previously earmarked for housing support will be reallocated to cooperative housing projects.

Over two years, $1.5 billion CAD will be invested in 6,000 new affordable housing units as part of the Rapid Transition Housing Initiative. At least a quarter of the projects will be aimed at women. The Government of Canada is allocating $200 million CAD to support buy-to-let programs.

$6.3 billion CAD will be allocated over seven years for indigenous housing. $150 million CAD over two years for housing and infrastructure in northern regions. $2.9 billion CAD for housing for other vulnerable groups.

Beginning in 2023, Canadians living with a multigenerational family will receive a tax credit of up to $7,500 CAD for home remodeling for the convenience of seniors and people with disabilities.

To protect buyers, the government is going to draft a Home Buyers Bill of Rights that would ban blind bidding, ensure the right to inspect a home before buying it and get a complete history of previous transactions with it.

Owners who sell real estate that they have owned for less than a year will have to pay tax on profits as entrepreneurs. The exceptions are those who sell a home for family reasons (death of a loved one, birth of a child, divorce) or due to the need to move (e.g., a new job).

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