The governing Liberal Party\u2019s election promise to introduce a new tax-free home savings account that would function much like RSPs and TFSAs to help first-time buyers is a welcome pledge, says Christelle Mwamba, an agent with Mortgage Scout.<\/p>\n
The savings account would be available to Canadians under 40 and allow them to bank $40,000 that could be put towards their down payment.<\/p>\n
\u201cThe down payment is key right now\u2014that\u2019s what everybody\u2019s struggling to save,\u201d she said. \u201cFirst-time buyers are usually millennials who want to move from the city to suburbia and buy a house. Especially with prices going up, at least now they have a tool on which they won\u2019t be taxed. With prices rising, down payments are higher, so the more you put down, the lower your mortgage amount will be and you can pay it off faster.\u201d<\/p>\n
Additionally, the Liberals are doubling the First-Time Home Buyer Incentive to $10,000, which Mwamba believes will boost the hitherto little-used credit\u2019s appeal.<\/p>\n
One curious election promise the party made is increasing the cap on mortgage insurance from $1 million to $1.25 million because average prices in Canada\u2019s key markets will likely surpass the latter amount by the time it\u2019s implemented, says Mwamba.<\/p>\n
\u201cIt\u2019s a good thing because it gives first-time homebuyers more options to come up with less capital and enter the market,\u201d she said, \u201chowever, by the time it\u2019s implemented it might be too late because prices are still going up.\u201d<\/p>\n
The Conservatives pledged to curtail non-resident ownership of real estate by requiring foreign buyers to move to Canada if they\u2019re going to own any property in the country. Mwamba says that could be short-sighted, though, because rental supply in major markets hasn\u2019t kept apace with demand.<\/p>\n
\u201cMaybe tax them but we can\u2019t stop foreigners from coming. People like me came to this country to get educated and after the first year of school you don\u2019t want to live on campus. If your parents can buy you a condo and you can live there, that helps.\u201d<\/p>\n
Additionally, the Tories want to remove the B-20 stress test for borrowers who shop their mortgages around to other lenders, an amendment Mwamba welcomes because it will force lenders to offer more competitive rates. She believes that, at present, the stress test is precluding homebuyers, especially first-timers, from participating in the housing market.<\/p>\n
The NDP has proposed increasing high-ratio mortgage amortizations to 30 years from 25, and that can help a lot of first-time buyers get over the hump, says Mwamba, who frequently sees situations in which buyers could use the added flexibility that an additional five years to amortize their mortgages would provide.<\/p>\n
However, the party also wants to raise the capital gains tax and Mwamba says that\u2019s a non-starter.<\/p>\n
\u201cCurrently, when you sell your principal residence you don\u2019t pay capital gains unless it is a rental property, so an increase in capital gains tax will affect Canadian and foreign real estate investors. I\u2019m not in favour of that; it doesn\u2019t make sense because if you stop people from selling their homes then you\u2019re not allowing new buyers into the market and people get stuck on the housing ladder.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
The governing Liberal Party\u2019s election promise to introduce a new tax-free home savings account that would function much like RSPs and TFSAs to help first-time buyers is a welcome pledge, says Christelle Mwamba, an agent with Mortgage Scout. The savings account would be available to Canadians under 40 and allow them to bank $40,000 that […]<\/p>\n","protected":false},"author":6,"featured_media":23931,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts\/9301"}],"collection":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/comments?post=9301"}],"version-history":[{"count":1,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts\/9301\/revisions"}],"predecessor-version":[{"id":23930,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts\/9301\/revisions\/23930"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/media\/23931"}],"wp:attachment":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/media?parent=9301"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/categories?post=9301"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/tags?post=9301"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}