Are Liberals really looking to make home-buying more affordable for millennials?
Home prices have soared over the past decade. This has proved to be a difficult time for fist time home buyers. How does this provide an opportunity for the younger generation to enter into the housing market? Quick answer, it doesn’t. Is there a way to make homes more affordable to allow the younger generation to enter into the Vancouver housing market? Let’s take a look and see if the government is taking any steps to remedy the situation.
The Trudeau government is looking for ways to make home-buying more affordable for millennials. This was shared by Finance Minister Bill Morneau at the end of January. Morneau told the business audience that the Liberal government has focused on three housing-related issues since coming to office in 2015. 1) Canada’s shortage of affordable housing, 2) a run-up in real-estate prices in some markets and 3) ensuring millennials can afford homes. Monroe said that the introduction of the stress test was to help ‘cool off’ the hottest markets in Vancouver & Toronto. This would make it more difficult for potential home buyers to take out larger mortgages.
“The middle part — the big middle part — is the affordable housing for millennials,” said Morneau, who will release his election-year budget in the coming weeks that will also lay out Liberal platform commitments.
“That’s a real challenge and there’s multiple things we’re looking at in order to think about how we can help in that regard.”
Younger Canadians have expressed their concerns about entering into the market as home prices in some markets continue to slip out of reach.
Conservative MP Karen Vecchio argued in a statement Tuesday that Trudeau government policies, including its carbon tax, have made housing less affordable.
“Justin Trudeau’s policies are making life more expensive for Canadians, pushing their dream of owning a home further and further away,” Vecchio said.
“NDP Leader Jagmeet Singh proposed measures he insisted will help build 500,000 new affordable housing units across Canada over the next 10 years. Singh only offered a few details, but said Ottawa should stop applying GST to the cost of building new affordable units, provide a subsidy to renters who spend more than 30 per cent of their incomes on housing and double a tax credit for first-time home-buyers to $1,500 from $750.”
“In fall 2017, the Liberals unveiled a 10-year, $40-billion national housing strategy, which the government has billed as a plan that will provide more social housing and affordable rental units.”
“It was designed to build up Canada’s stock of affordable housing and eventually provide direct benefits to tenants to ensure fewer Canadians remain or become homeless. The government insisted the approach would also help make homes more affordable in markets like Vancouver by giving young Canadians more affordable rental options where few currently exist.”
“In their 2015 election platform, the Liberals also promised to enhance the popular Home Buyers’ Plan, which enables first-time buyers to borrow up to $25,000 tax-free from their registered retirement savings to put towards the purchase of a home. The amount must be repaid within 15 years.”
What does this really mean?
In conclusion, there are plans to designate tax dollars to build more affordable housing. This is a plus, sort of. However, it doesn’t really solve the spread that is growing between income and home prices. Is borrowing tax free money that is yours for the future really a solution? It seems as though some shift in the taxes that are already in place need to occur. It’ll be interesting to see how things come back into balance. Make sure you stay tuned, and up to date with our current blog posts and video blogs!
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