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2022 Federal Budget - Housing Highlights

Posted by Ron Neal on Friday, April 15th, 2022 at 7:02pm.

2022 Federal Budget - Housing Highlights

 
Here is a summary of the federal budget with respect to housing and our industry and my views; 
 
1- A tax free housing account up to $40,000 for first time buyers which is great and allows saving towards down payments without any tax implication or conditions contrary to current available options but rest assured this will add more demands into the pool of buyers over the long term. 
 
2- The budget once again blamed flippers, speculators, blind bidding and foreign buyers for high prices . The government is proposing a two-year ban on purchases of residential real estate by people and companies who aren't citizens or permanent residents but Refugees, some international students and people with work permits would be exempt from the policy therefore no change to what we know as far as foreign buyers buyers mainly students category which if excluding above groups probably less than 1% of our market with respect to this claimed statement by government.
 
3- The budget also includes a pledge that anyone buying and selling a property within a year "would be considered to be flipping properties and would be subject to full taxation which is a being tax law for years and mostly a matter of enforcing existing tax rules which government has failed to enforce again no change to help supply issues.
 
4- The government also vowed to bring forward a Home Buyer's Bill of Rights that would include, among other initiatives, an end to blind bidding , so this is a statement not part of the budget therefore means nothing .
 
5- Finally Ottawa has earmarked about $10 billion across various initiatives to get shovels into the ground. There's $4 billion over five years for a housing accelerator fund that will be run by the CMHC that hopes to create up to 100,000 new units, and half a billion to expand co-operative housing which is subject to cities development process and willingness to remove barriers and if works it will have a long term impact on housing probably we will not notice anything for another 5 years in terms of supply.
 
The only good news from the government is that finally they are admitting there are SUPPLY issues but none of the above announcements will have any major impact on our housing and the momentum of our industry will continue and the budget simply has create confusion and hope for buyers but once dust settle market will be back in full gear. I suspect smart buyers, since they are certain with the increase of interest rate will act immediately to secure a property and lock in a long term rate, possibly 7 years and benefit from low and affordable interest rates. 
 
Sadly the budget primarily aims at trying to subdue demand while doing nothing to address the problems with red tape and bureaucracy that causes undue delays, higher costs and severely hampers the supply of new housing.
 
That's my take on it.
 
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