Housing affordability is going to be a main feature of tomorrow’s federal budget, CTV News has learned, including moving to make it illegal for foreigners to buy any residential properties in Canada for the next two years.
The government is set to follow through on a series of 2021 Liberal campaign commitments as part of the 2022 budget, including implementing a new “Tax-Free First Home Savings Account” that, if it mirrors the platform promise, will allow Canadians under 40 to save up to $40,000 towards their first home.
With the aim of shortening the time it’ll take to afford a down payment, first-time home buyers would be able to withdraw this money tax-free to put towards their first home purchase, with no requirement to repay it, per the Liberal platform.
The overall housing package is expected to total approximately $10 billion in new funding over the next five years.
The foreign buyers ban will apply to condos, apartments, and single residential units. Permanent residents, foreign workers, and students will be excluded from this new measure. Foreigners who are purchasing their primary residence here in Canada will be exempt.
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The policy change will be legislated, giving the government powers to prescribe penalties and potential judicial powers to address instances of non-compliance, according to a government source. There is no cost attached to this foreign buyers measure yet.
Among the several housing-focused promises in the party’s platform, the Liberals promised to ban foreign money from purchasing a non-recreational, residential property in Canada for the next two years, and work with the provinces and territories “to better regulate the role of foreign buyers in the Canadian housing market.”
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Given the housing crunch, the lack of inventory, and the skyrocketing prices, CTV News has learned that Thursday’s budget will also include:
- $4 billion to help municipalities update their zoning and permit systems to allow for speedier construction of residential properties;
- $1 billion for the construction of affordable housing units; and
- $1.5 billion in loans and funding for co-op housing.
The $4 billion for municipalities appears to be addressing one of the housing elements from the Liberal-NDP deal. The confidence-and-supply agreement included a pledge to move ahead with “launching a Housing Accelerator Fund.”
This is in reference to a Liberal platform commitment, which is meant to incentivize housing construction by cutting red tape and building other digitized systems related to municipal planning, zoning and permitting systems.
It remains unclear how many housing units will be created under these spending measures.
“The objective is to keep houses in Canada for Canadians,” said a government official speaking to CTV News on a not-for-attribution bxjmtzywasis.
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Construction cranes tower above condos under construction near southeast False Creek in Vancouver, on Sunday February 9, 2020. THE CANADIAN PRESS/Darryl Dyck
