Canada Budget 2022: Tax-free savings account coming for first-time homebuyers

23:56  07 april  2022
23:56  07 april  2022 Source:   globalnews.ca

Oscars 2022: The Best Parties, From Start to Finish (Photos)

  Oscars 2022: The Best Parties, From Start to Finish (Photos) Academy Awards Week began with a celebration of Black women's achievements in Hollywood and crescendoed with "The Slap Heard Round the World" as one Black man sucker slapped another during the broadcast and women lost ground in the never-ending battle for equality (and in fighting our own battles, as well). There were some strides, as "CODA," a female-directed-and-written film took Best Picture and Jane Campion snagged Best Director (the third woman in 94 years) for "The Power of the Dog," but the talk of every after-party on Sunday night wasn't celebrating those achievements; instead, every conversation was about the two famous men and the one famo

A home for sale sign is shown in a Toronto west end neighbourhood May 8, 2020. © THE CANADIAN PRESS IMAGES/Graeme Roy A home for sale sign is shown in a Toronto west end neighbourhood May 8, 2020.

The Liberal government is planning to spend $10.14 billion on housing over the next five years in its 2022 federal budget, looking to make homes more affordable by expanding supply and helping young Canadians save for their first home.

Ottawa’s spending document also includes plans to double the pace of homebuilding in Canada in the decade ahead, support those already struggling with housing and limit profiteering in the sector.

Here’s what the government is proposing to try to make housing more affordable.

NFL power rankings: How have free agency, trades reshaped 2022 pecking order in offseason?

  NFL power rankings: How have free agency, trades reshaped 2022 pecking order in offseason? Major personnel moves have major aftereffects on the league's 2022 pecking order.1. Rams (1): They've lost a few key cogs from the Super Bowl 56 lineup – OLB Von Miller (Bills), LT Andrew Whitworth (retired), WR Odell Beckham Jr. (unsigned and injured) – but it happens just about annually to defending champs, the Brady Bucs notwithstanding. But LA also effectively made a noteworthy wideout swap, signing Allen Robinson before trading Robert Woods, while reloading the O-line. And more important? Many of the NFC's prominent would-be contenders have taken more concerning broadsides than the Rams have.

The 2022 budget includes plans to create a new Tax-Free First Home Savings Account (TFFHSA) to help Canadians struggling to get into the housing market save for the cost of a down payment.

Real estate hopefuls would be able to save $8,000 per year to a maximum of $40,000 per person towards the purchase of a first home. If buying as part of a household, each individual putting money towards the purchase of a home can save in their own TFFHSA.

Read more:

Some Canadians struggle to enter housing market as costs rise — ‘Nothing we can do’

Like existing tax-free savings accounts, withdrawals from a TFFHSA would be non-taxable, including any investment income generated within the account.

Contributions are also tax-deductible, like a registered retirement savings plan.

Gas tax savings to start for Alberta drivers Friday: ‘Watching like a hawk’

  Gas tax savings to start for Alberta drivers Friday: ‘Watching like a hawk’ Prime Minister Justin Trudeau met with residential school survivors during a visit to the Williams Lake First Nation in B.C. on Wednesday. There, he announced an additional $2.9 million in funding to provide support as the First Nation grapples with a recent discovery of potential burial sites at a former residential school site.

“Tax-free in, tax-free out,” the budget document says.

Sahir Khan, executive vice-president at the University of Ottawa’s Institute of Fiscal Studies and Democracy, says the TFFHSA looks to be a “pretty generous measure” in the 2022 budget.

“Getting that down payment is probably the most daunting issue for young people trying to enter the housing market,” he tells Global News.

“In terms of removing a key barrier to access to the ownership market, this looks to be a very significant measure.”

The TFFHSA is expected to roll out in 2023. Federal estimates put the overall economic impact from the account at $725 million over five years.

The budget proposes doubling the First-Time Home Buyers’ Tax Credit to $10,000, retroactive to any homes purchased after Jan. 1, 2022.

Read more:

Home prices under ‘full-scale attack’ as interest rates, taxes rise, economist says

Braves to sell $151 burger at Truist Park with option to buy World Series ring for $25,000

  Braves to sell $151 burger at Truist Park with option to buy World Series ring for $25,000 The Atlanta Braves revealed a $151 burger on MLB's 2022 Opening Day called "The World Champions Burger."The half-pound waygu beef burger, called "The World Champions Burger," is served on a toasted, Irish-buttered brioche bun. The other toppings are pan-fried eggs, gold-leaf-wrapped Hudson Valley foie gras, grilled cold water lobster tail, heirloom tomato, garden-fresh Bibb lettuce, Tillamook cheddar cheese and truffle aioli.

Likewise, the First-Time Home Buyer Incentive will be extended to March 31, 2025.

The federal government says it’s exploring options to make the program “more flexible and responsive” to the needs of prospective homebuyers.

The budget document pointed to single-income households specifically as due for extra support.

The Liberal government started off its budget document preamble saying that Canada is in the grips of a “housing shortage” and claimed increasing the supply of homes is the most effective way to make housing more affordable for Canadians.

Canada will need to build around 3.5 million by 2031 to improve affordability, the budget predicted.

To get there, the budget lays out plans to double the annual pace of building in the country over the next decade, up from the current 200,000 units per year.

Video: B.C. housing inventory lacking supply of affordable homes

Part of this will see the creation of a $4-billion Housing Accelerator Fund, run by the Canada Mortgage and Housing Corp. (CMHC), with the goal of creating 100,000 net new housing units over the next five years.

Promising more fiscal restraint, Freeland tables a lower-spending budget focused on housing

  Promising more fiscal restraint, Freeland tables a lower-spending budget focused on housing Finance Minister Chrystia Freeland tabled her second federal budget Thursday — a multi-billion dollar plan meant to help the country weather increasingly uncertain times through major investments to cool Canada’s red-hot housing market and supercharge the transition to a cleaner, greener economy. Freeland signalled the days of eye-popping 12-digit budget deficits are coming to an end and promised a return to greater fiscal prudence now that the immediate threat of COVID-19 has abated.

Details were sparse in the budget document, but the fund could include measures to incentivize municipalities to speed up development approvals for new builds.

The CMHC’s Rapid Housing Initiative gets an extra $1.5 billion in the budget and will be extended by two years.

“This is the most ambitious housing plan to tackle supply and it’s also just a first step,” Finance Minister Chrystia Freeland told reporters before tabling the budget Thursday.

Read more:

Canada’s treasury ‘depleted’ as budget weans COVID spending, eyes uncertainty

But Conservative Party interim Leader Candice Bergen criticized the federal government's timelines for failing to help Canadians looking to enter the housing market today.

“Canadians are worse off today than they were six years ago. Families struggling to pay their bills have been let down. Families trying to buy a house have been let down. Not one house will be built or bought this year under these NDP-Liberal programs," she said in a statement after the budget's release.

Khan told Global News the federal budget got “the diagnosis” for Canada’s housing affordability problems “absolutely right.… It’s supply.”

But expanding supply itself isn’t the standalone solution, Khan said – it’s “density” that Canadian cities will need.

The West Block – Episode 24, Season 11

  The West Block – Episode 24, Season 11 Watch the full episode of The West Block with host Mercedes Stephenson– April 10, 2022.Episode 24, Season 11

Other items in the budget aimed at increasing immigration flows into Canada will only put more demand on Canada’s already limited housing stock, reinforcing the need for greater densification in cities and less suburban sprawl.

Items like the Housing Accelerator Fund, which seeks to sweeten the deal for cities adding density to their neighbourhoods, will need to accompany a cultural shift that sees Canadians get used to a different style of living, Khan says.

“Ultimately, as Canadians, I think we're going to have to rethink what it means to be a homeowner and having the single-family detached dwelling with the white picket fence, and think about densification,” he said.

Read more:

COMMENTARY — The danger of the fading middle-class dream

The budget also includes hints at coming policy changes aimed at improving fairness in Canada’s housing market.

One of those is a proposal to set aside $475 million in the next fiscal year to provide a one-time payment of $500 “to those facing housing affordability challenges.”

The federal government said the specifics and delivery method for this support would be announced “at a later date.”

As well, the budget teed up plans to explore a Home Buyers’ Bill of Rights.

Included in this bill would be a plan to end “blind bidding” practices nationally, with potential measures to make a home’s sale price history more transparent and ensure a legal right to a home inspection before buying.

There were also measures to tamp down on the investing and speculation side of the real estate market.

Sabrina Maddeaux: Inflation tax pays for big Liberal government while regular Canadians fall behind

  Sabrina Maddeaux: Inflation tax pays for big Liberal government while regular Canadians fall behind On first glance, for the average Canadian worker, last week’s 2022 federal budget looks pretty innocuous — perhaps even like a good deal. There are no new income taxes for anyone but the wealthiest Canadians, or plans to tax the sale of principal residences. There’s no new sales tax or gas tax. In fact, there are an abundance of tax exemptions and credits for everything from buying a first home, to renovating a home and surrogacy. In addition, there are big new programs on the horizon, like cheap childcare and means-tested dental care. However, the 2022 budget contains a de facto hidden tax on working Canadians: inflation.

The budget includes plans for a federal review to find out more about what role large corporate landlords play in the market and the impact on renters and homeowners.

Read more:

Canada housing market showing signs of ‘cooling’ as more interest rate hikes loom

Meanwhile, there were no concrete actions laid out in the budget to deal with so-called “renovictions” — large landlords buying up lower-income housing and evicting the existing tenants only to put the units back on the market at a higher rate.

The budget did set out new rules to tax property flippers. Anyone who sells a property they’ve held for less than 12 months would be considered to be “flipping” under the new rules and would be subject to tax on their profits as business income.

Finally, the government also announced plans to explore a two-year ban on foreign ownership in the budget.

Citing the influence of “foreign money” on rising home prices in cities such as Vancouver and Toronto, the feds said they intend to “propose restrictions that would prohibit foreign commercial enterprises and people who are not Canadian citizens or permanent residents from acquiring non-recreational, residential property in Canada for a period of two years.”

Refugees and international students would be among those excepted from the proposed law.

Khan says while foreign ownership has been a factor in Canada’s rising housing prices, the impact of the phenomenon is “baked into the cake” at this point, making the movement on the issue “important but symbolic.”

“I think we have to distinguish between those kind of nice-to-have measures versus those that are incredibly fundamental, which is finding ways to increase density and get people into housing in a different way than we did since the post-World War II era,” he says.

'Two different realities': For Ukrainian tennis players, Billie Jean King Cup in NC is sanctuary .
As they bounce around the world on tour, Ukrainian tennis players have spent more than a month placing daily phone calls to family members back home.Zavatska, ranked the No. 201 tennis player in the world, was born in Lutsk, Ukraine, where much of her extended family remain. Her dad was scheduled to join her at her apartment in France beginning Feb. 24 and subsequently accompany her to tournaments, but Russia's bombings began that day.

usr: 0
This is interesting!