With housing prices rising ever higher, the Liberal Party of Canada today announced an ambitious plan to help homebuyers, especially young first-time buyers. We are in the middle of election season in Canada. Every party brings new promises, and I will keep you informed of any announcements that may affect your real estate plans, hopefully in a positive way.
This post was first published during the 2021 federal election campaign. The proposals below are from that time.
A home for everyone: the Liberal Party plan
The party calls the program “A home for everyone”. According to the announcement, renters could see a game changer in the form of a government-backed rent-to-own plan.
Rent-to-own lets a tenant rent a home now and build toward buying it later. For many young families, the biggest hurdle is saving for a down payment while paying high rent. This idea aims straight at that problem.
Key measures for first-time buyers
Here are the main points of the Liberal Party announcement:
- The Liberal government is promising to commit a billion dollars in the form of loans and grants to private, not-for-profit and co-op partners, paving the way to homeownership in five years or less.
- The new program will allow young Canadians to save up to $40K and withdraw it tax-free toward the down payment on their first home. Moreover, unlike with RRSPs, they never have to pay it back.
- The program will double the first-time home buyers’ tax credit to $10,000.
- It would reduce CMHC mortgage insurance by 25%, which would lower monthly mortgage payments.
- Another option for first-time buyers is a deferred mortgage loan, as an alternative to the shared equity option the Liberal government already offers.
There are many more incentives in the plan to make buying a home easier than it is now. For full details, visit the Liberal Party of Canada’s housing plan page.
What these measures could mean for buyers
Each measure in the Liberal Party plan targets a different step in the buying journey. A tax-free savings account helps you build the down payment. A larger tax credit helps with closing costs. Lower mortgage insurance, in turn, reduces what you pay each month. Taken together, the ideas focus on the early years of ownership, when budgets are tightest. That is also when a small saving each month can make the biggest difference to a young family in Mississauga or anywhere in the GTA.
The shared equity option mentioned above goes back to the First-Time Home Buyer Incentive. I wrote about the earlier measures in my post on Budget 2019 incentives for first-time home buyers. If you are just starting out, my steps for first-time buyers in Mississauga can also help.
Why promises from the Liberal Party need a careful read
Election promises are plans, not law. Some change after an election, and some take a long time to arrive. So, it is good to know what the Liberal Party proposed. Still, it is wise to base your next move on the rules in place today.
Also, remember that other parties made their own announcements. In Part 2, I compared this with the NDP’s housing proposals. Looking at both helps you see where the debate was heading.
Planning your next move
Whether you plan to buy, sell or do both to move to a bigger house or downsize, I am always available to talk it through. There is often a better solution a professional can offer, sometimes one you had not thought of. In short, a clear plan will serve you well whatever the Liberal Party or any other party decides.
Meanwhile, please take care of yourselves and follow the safety precautions from health care professionals.
Talk to a Mississauga real estate agent
I will be glad to hear from you at your earliest convenience. Please send me a note through my contact page or call me at 416 908 5600. A. Q. Mufti, Sales Representative, RE/MAX Real Estate Centre Inc., Brokerage. If you found this helpful, I would appreciate a Google Review.
