Government Budget Tackles Housing Crisis

The government of Canada plans to tackle the housing crisis in its 2022 budget by building more homes and making housing more affordable for first time buyers across the country. The Tax-Free First Home Savings Account will enable first-time home buyers to save up to $40,000. The funds are tax-deductible and withdrawals to purchase a first home are also non-taxable. The First-Time Home Buyers’ Tax Credit will be doubled to $10,000, providing up to $1,500 in direct support to home buyers. The First-Time Home Buyer Incentive will be extended to March 31, 2025. This program allows eligible first-time home buyers to lower their borrowing costs by sharing the cost of buying a home with the government (five or 10 per cent). Measures to reduce the cost of residential properties include a ban on foreign investment in Canadian housing and restrictions on property flipping. The government also plans to invest $200 million in dedicated support under the existing Affordable Housing Innovation Fund to help develop and scale up rent-to-own projects. It will engage with provinces and territories to implement a Home Buyers’ Bill of Rights that will eliminate unfair practices like blind bidding or asking buyers to waive their right to a home inspection. For those Canadians living with their parents, grandparents, or in multi-generational homes, Canada is planning to provide up to 15 per cent of $50,000 (up to $7,500) for eligible renovation and construction costs in support of constructing a secondary suite for a senior or an adult with a disability, starting in 2023 under the Multigenerational Home Renovation Tax Credit. As well, Budget 2022 doubles the qualifying expense limit of the Home Accessibility Tax Credit to $20,000 for the 2022 and subsequent tax years to help seniors and persons with disabilities to live and age at home. This means that those planning renovations and upgrades to homes safe and accessible can get a tax credit of up to $3,000 – an increase from the previous tax credit of up to $1,500.