Trudeau promises new incentives worth billions and a tax on 'flipping' to help Canadians buy a home

Liberal Leader Justin Trudeau todaypromised a suite of new measures to help Canadians buy a home at a time when a red-hot housing market has made owning property seem like a distant dream for many young people.

Speaking to reporters in Hamilton, Trudeau said the real estate market is afflicted by "instability" and "uncertainty" and a COVID-fuelled spike has led to soaring prices, bidding wars, rampant speculation and too manyvacant properties. He said the situationdemands government intervention to help more people acquire their own homes.

The aggressive plan billions of dollars in new funding, measures to curb the practice of"flipping" homes, efforts toblockforeign nationals from buying homes for two years and new regulatory measures to police exploitative real estate agents comes at a time when Canadians are telling pollsters that housing is one of the issues they care about most.

The three-point program includes commitments to "unlock home ownership" through new government funding, a plan to build more homes to address supply constraintsand measures to establish and protect new rights for buyers.

"If you work hard, if you save, that dream of having your own place should be in reach. But for too many people, it just isn't and that's not right," Trudeau said.

"You shouldn't have to move far away from your jobor schoolor familyto afford your rent. You shouldn't lose a bidding war on your home to speculators. It's time for things to change."

A promise to double tax credit

If the Liberals arere-elected on Sept. 20, Trudeau said, he wouldintroduce a first home savings accountwhich would allow Canadians up to age 40 to save $40,000 toward theirfirst home and withdraw it tax-free when it comes time to buy. Money added to the account would go in tax-free and couldbe withdrawn without any taxes owing on possible investment gains.

He said a Liberal government would double the first-time homebuyers tax credit from $5,000 to $10,000 an incentive that would help with the many closing costs that come with buying property.

To reduce mortgage costs, a Trudeau-led government would force the Canada Mortgage and Housing Corporation to slash mortgage insurance rates by 25 per cent a $6,100 savings for the averageperson. The Liberals are also proposing a sort of "rent-to-own" program, with $1 billion in new funding to "create a pathway for renters in five years or less."

To help with the supply side of the equation, Trudeau promised to "build, preserveor repair 1.4 million homes in the next four years" by giving cities "new tools to speed up housing construction." A re-elected Liberal government, he said,would create a $4billion pool of cash that cities couldtap if they help tocreate "middle-class homes." The party believes this program which would crack down on speculators owning vacant land wouldmaketens of thousands of new homes availablein four years.

The party is also promising $2.7 billion over four years to build or repair more affordable homes,money to convert empty office space into housing, a "multigenerational home renovation tax credit" to offset the costs ofadding a secondary unit to a home, and more money for Indigenous housing to help First Nations, Mtis and Inuit people who live in substandard conditions.

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'Total price transparency'

Trudeau also promised to rein in abusive real estate practices that have made buying a home an unpleasant experience for many in recent years.

A new federalHome Buyers' Bill of Rights would ban "blind bidding" homebuyers vying for the same property without knowing how much others are offering.It wouldestablish a legal right to a home inspection, ensure "total price transparency" so that awould-be buyer knows the history of recent house sale prices require more disclosure from real estate agents who represent both the buyer and the seller, and demand thatbanks offer mortgage deferrals for six months to someone who's losttheir job.

Much of what the Liberals proposein thisbill of rights falls outside of the traditional limits of federal responsibility. According to the constitutional division of powers, property and civil rights and "all matters of a merely local or private nature" are considered provincial jurisdiction.

A Liberal campaign official, speaking on background, said some of the proposed measures, such as the prohibition on blind bidding, could be enforced throughnewpenalties under the Criminal Code.

The Liberalscould also use the federal government's taxation powers and its authority over underwriting mortgages to push through changes. Some of the other promises would require negotiation.

"The Criminal Code is a vehicle through which the federal government could act on those things," the official said. "But we have our eyes open to the fact that there will have to be some convening with the provinces, work with the provinces but there's a lot of space for federal leadership."

The Canadian Real Estate Association, which represents some 135,000 real estate agents, was quick to criticize the Liberal plan, which the group said amounts to "criminalizingthe way Canadians sell their homes."

The association instead argues that a lack of supply is at the root of Canada's housing troubles.

"Canadians have the right to choose how they want to transact what is likely the largest purchase of their lives. The proposed banning of blind bidding removes the ability for Canadian homeowners to sell their home the way they want,"said CREA in a media statement.

Matching a promise made by the Conservatives, a Liberal government would also ban new foreign ownership of Canadian homes for the next two years a measure meant to put the brakeson rampant housing speculation driven by offshore money.

In addition to the ban, Trudeau said he would expandthe upcoming tax on vacant housing owned by non-resident and non-Canadians to include foreign-owned vacant land in large urban areas.

The Liberals alsowould impose an "anti-flipping tax" on residential properties, which would require that properties either be held for at least 12 months or face burdensome taxes.

Asked today if the new measures amount to an admission that the existing national housing strategy has not delivered as promised, Trudeau said that whilethe government's 2017 planhelped to expand the pool ofaffordable housing for thousands of peopleand cut down on chronic homelessness,it's obvious more needs to be done.

WATCH |Party leaders pledge to address housing crisis:

Major party leaders outline plans to alleviate housing crisis

3 years ago

Duration 1:54

The leaders of the Liberals, Conservatives and NDP have all unveiled their plans to make housing more affordable in Canada with the opposition parties criticizing Justin Trudeau for not doing enough over the last six years.

"Let's remember, in 2017, as we launched that national housing strategy, we were starting from a standing start because for the previous ten years a Conservative government decided the federal government had no role to play in housing. That's wrong," Trudeau said. "But absolutely, there is more to do much more to do."

Trudeau took a swipe at Conservative Leader Erin O'Toole's housing plan, which commits to building one million new homes over three years while easing mortgage requirements and making more federal land available for development.

Trudeau said the Conservatives will "do what they always do, give the biggest breaks to the wealthiest few" a reference to O'Toole's platform commitment to create incentives for Canadians who invest in rental housing by making tweaks to the capital gains tax regime.

The Conservatives maintain the housing "crisis" is driven by a shortageof supply and say programs that encourage people and companies to build more rental units will help alleviate the problem.

"Erin O'Toole would give your landlord a tax break on selling the building and do nothing for you. At the end of the day, this is about you," Trudeau said.

"We can't afford Erin O'Toole approach on housing, just like we can't afford his plan to rip up our commitment on $10-a-day child care or on vaccinations."

Conservatives, NDP say Liberal housing policy has failed

Speaking to reporters in Ottawa, O'Toole said he won't take lessons from Trudeau on housing.

"Mr. Trudeau's had six years and he's failed. The housing crisis has exploded in the last three, four years under his leadership," O'Toole said. "After six years of inaction, more hollow words today is not what Canadiansdeserve. They deserve a plan."

NDP Leader Jagmeet Singh was equally critical, saying the situation has only gotten worse in the last six years under Trudeau.

"Housing has become more expensive. Renting has become more expensive. We can't handle another four years of this," Singh saidat a campaign stop in Mississauga, Ont., where he announceda plan to nationalize Revera,the country'slargest for-profit long-term care home operator.

The NDP's housing platform is focused on renters. The party maintains that the Liberals have "neglected" Canadians who don't own a home and existing programs are "too small to make a real difference for most Canadians."

An NDP government would streamline funding applications for co-ops, social and non-profit housing while waiving the federal portion of the GST/HST on the construction of new affordable rental units in order to boost supply. Singh has said a government led by him wouldfree up federal lands for these sort of projects, turning unused and under-used properties into "vibrant new communities."

For homebuyers, the NDP would reintroduce 30-year terms for insured mortgages on entry-level homes. Like the Liberals, the NDPalso would double the home buyers' tax credit to give people about$1,500 to help with closing costs. They also promise to slap a 20 per cent foreign buyers' tax on homes sold to people who aren't Canadian citizens or permanent residents.