The federal budget promises $10 billion to make housing more affordable. Measures include tax credits for a variety of items, but the big ones, at least to me are:
- A two-year ban on foreign buyers
- Sales taxes on assignment sales
- No principal residence exemption for properties bought and sold within 12 months
- Multigenerational Home Renovation Tax Credit
This is a refundable tax credit for Canadians who are taking home building into their own hands. Families who are constructing a secondary suite for a senior or adult with a disability would be able to claim 15 percent of up to $50,000 in eligible renovation and building costs, resulting in up to $7,500 worth of savings.
- Tax-Free First Home Savings Account
Starting in 2023, first-time homebuyers would be able to save up to $40,000 in a new account. As with a registered retirement savings plan, contributions – in this case, up to a maximum of $8,000 a year – would be tax-deductible. And, as with a tax-free savings account, withdrawals would be tax-free. Investment growth inside the account would also be tax-free.
- Doubling the First-Time Home Buyers’ Tax Credit: First-time buyers who’ve purchased a property on or after Jan. 1 would be able to claim $10,000 – up from the current $5,000 – which would double the maximum non-refundable tax rebate from $750 to $1,500.
- Doubling the home accessibility tax credit: Seniors would be able to claim a maximum of $20,000 worth of expenses for upgrades such as walk-in bathtubs and wheelchair ramps that make their homes more accessible. The new ceiling would be double the current cap on eligible expenses and would result in a maximum tax credit of $3,000.
I should stress these are not effective yet, simply announced. No doubt this will result in a few changes in the real estate market, with more to come over the next few weeks. Expect to hear more on, the cooling-off period and increases for both variable, fixed, and qualifying interest rates.
Details of the budget are available online, but I found this article from the Globe and Mail to provide a good summary – Here’s how the 2022 federal budget affects home buyers and consumers – The Globe and Mail
If you or a loved one have a mortgage up for renewal, debt outside your mortgage to consolidate, a home renovation project or an upcoming home purchase coming up, please email firstname.lastname@example.org to get started on reviewing your options.
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