Deputy Prime Minister and Finance Minister Chrystia Freeland introduced comprehensive housing affordability measures designed to aid both prospective first-time homebuyers and existing homeowners. These measures, announced in Toronto, include increasing the maximum RRSP withdrawal for first-time homebuyers from $35,000 to $60,000, alongside the Tax-Free First Home Savings Account, which allows for annual savings of up to $8,000 and a lifetime contribution limit of $40,000, providing tax rebates and tax-free withdrawals for down payments.
Furthermore, Freeland extended the repayment period for RRSP contributions for first-time homebuyers to five years, compared to the previous two years. Alterations to mortgage repayment schedules were also disclosed, granting first-time buyers with insured mortgages on newly-built homes a 30-year period for repayment, aiming to alleviate monthly financial burdens.
The Mortgage Charter underwent revisions, requiring lenders to reach out to borrowers up to 24 months before mortgage renewal to discuss affordability options. Temporary measures, such as extensions on the amortization period for mortgage holders facing financial strain, are now made permanent, ensuring flexibility without additional fees or penalties.
In tandem with these initiatives, the parliamentary budget officer reported a necessity for 1.3 million additional homes by 2030 to bridge Canada’s housing gap. Despite this, the Liberal government has spearheaded numerous housing announcements, focusing on bolstering housing supply through low-cost loans for rental construction and infrastructure funding for provinces and municipalities, preceding the federal budget.
Source: CBC News