In the last federal election, the Liberal party made three big promises about housing: they would create a $125-million tax break for landlords, expanding the RRSP Home Buyer’s Program (HBP) and reviewing home affordability in this country’s most challenging real estate markets, Toronto and Vancouver.
Four years later, the Liberals have done OK. They’ve raised the withdrawal limit under the HBP from $25,000 to $35,000 and earmarked $40-billion for a national housing strategy including the new first-time homebuyer incentive. But in Vancouver and Toronto, more has been done about the housing market by provincial governments. The 42nd Parliament also halved the TFSA contribution limit and took aim at entrepreneurs for what they called an unfair tax advantage.
Now it’s 2019, and as we ponder all the scandals that get saved up for election time, we must also ponder the promises the federal parties are making and how they’ll affect our fortunes when it comes to housing and personal finance. Here’s what the three major political parties have put on the table:
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The incumbent Liberal Party is beating the drum of the middle class, but the word “housing” appears just 7 times in their 85-page platform (“tax” appears 58 times and “crime” appears 15 times, in case you’re wondering). In addition to a few important but niche promises like housing for veterans, here’s what the Liberals say they’ll do for your personal finances and housing:
- Expand the First-Time Home Buyer Incentive. The incentive is already in place, giving a 10% loan to first-time homebuyers earning under $120,000 and buying a home for less than $480,000. Now, the Liberals are promising to expand it with higher purchase price limits in expensive markets and a higher minimum income requirement.
- Limit housing speculation with a national vacancy tax. British Columbia’s vacancy tax on Vancouver’s foreign-owned homes has raised $115-million, according to the Canadian Press, and the Liberal Party promises to introduce a similar tax at the federal level. With the average Vancouver property subjected to the tax being worth $1.45-million, the jury’s still out on whether the vacancy tax has done anything to improve housing for people like you and me.
- Increase the basic personal amount to $15,000. This change would mean Canadians wouldn’t pay federal income tax on their first $15,000 of income. That’s up from the current $11,809, and according to the Liberal platform will save an average family $600 per year in taxes.
- Improve parental benefits. The Liberals have promised new families will get higher payments from the Canada Child Benefit (CCB) and eliminating tax on maternity and parental benefits.
Source: Liberal Party Platform
Andrew Scheer and the Conservative Party have spent more time campaigning on what the Liberal Party has done wrong (or at least it feels that way), but they have announced some important policies about housing and personal finance:
- Re-introduce 30-year terms for CMHC-insured mortgages. During the recovery from the great recession of 2008-09, the Federal Government (then-led by Stephen Harper’s Conservatives) took action to reduce risk in the housing market by making it harder to qualify for a mortgage. The Conservatives say they will un-do at least one of those changes by allowing homebuyers with less than 20% down payments to amortize their payments over 30 years, instead of the current 25-year maximum.
- Reform the mortgage stress test. Introduced at the start of 2018, the “stress test” forces home buyers to qualify at a much higher mortgage rate than they would actually pay. (The forecast rapid run-up in mortgage rates has yet to materialize). The Conservatives have promised to eliminate the stress test for mortgage renewals and have made vague promises about easing the stress test for first-time homebuyers.
- Tax cuts for everyone. The conservatives think you pay too much tax, and they’ve pledged to reduce income taxes for all Canadians, regardless of income level. There aren’t many details, but their website says a couple earning an average salary will save $850 per year on income tax. The Conservative have also promised to eliminate the federal portion of the GST/HST on home heating bills and scrap the federal carbon tax.
- Better parental benefits. If elected, the Conservatives say they’ll make life easier for parents. The Conservative flavour of this policy includes eliminating taxes on maternity (but not parental) benefits, re-introducing tax credits for children’s programming, boost RESP matching to 50%, and introducing EI leave benefits for new adoptive parents.
Jagmeet Singh and the New Democratic Party have housing as a core tenet of their platform, as you would expect from Canada’s mainstream social democracy party. In addition to promising better housing for our most vulnerable citizens, especially Indigenous women, girls, and LGBTQI2S+ people, the NDP want to make life easier for renters and first-time homebuyers. Promises include:
- 500,000 units of affordable rental housing over 10 years. The NDP says they will allocate $5-billion in federal funding to create affordable rental units. They’ve also pledged to incentivize construction by eliminating the federal portion of the GST/HST on new rental units.
- Re-introduce 30-year terms for CMHC-insured mortgages. Like the Conservative Party, the NDP have promised to re-introduce 30-year terms for homebuyers with less than 20% down payments. The change will make it easier to qualify for a mortgage and reduce monthly payments but increase long-term debt and interest payment for homebuyers who choose a 30-year mortgage.
- Double the Home Buyer’s Tax Credit to $1,500. First-time home buyers can currently claim a non-refundable tax credit that cuts their tax obligation by $750 in the year they buy their home. The NDP is pledging to double that credit.
- Introduce a tax on foreign home buyers. The details are slim, but the NDP says that home sales to people who aren’t Canadian Citizens or permanent residents will be subject to a federal tax if they are elected.
Whether you believe any of these changes will happen or not, you earn the right to complain by voting. You can vote at the advance polls today or in the general election on Monday, October 21st. Find all the information you need to vote at Elections Canada.