First-time buyers — particularly those in expensive markets such as the GTA — thought they had a powerful friend in Prime Minister Justin Trudeau.
Leading up to the election last fall, one of Trudeau’s campaign promises was to modernize the federal Home Buyers’ Plan. The plan as it stands now allows first-time buyers to withdraw up to $25,000 from their RRSP to put toward a down payment on a home. They then have up to 15 years to repay the funds.
In 2009, then Prime Minister Stephen Harper raised the withdrawal limit to $25,000 from $20,000. In his own 2015 re-election campaign, Harper was proposing to increase it further, to $35,000.
Trudeau had proposed to bring the HBP up to 2016 standards to allow Canadians impacted by sudden and significant life changes to buy a house without tax penalty. He said this would ease the burden on Canadians facing job relocation, the death of a spouse, marital breakdown or a decision to accommodate an elderly family member.
However, in his inaugural budget — Budget 2016 tabled on March 22 — here’s what Trudeau’s first financial plan included for first-time homebuyers: absolutely nothing. No update or revision to the HBP was to be found.
It would have been welcomed news to first-time buyers. Housing costs in the GTA are rising (which is a good thing, once you own a home, as it’s an indication of market health). But saving and otherwise obtaining the funds to take that important first homebuying step are becoming increasingly difficult. This is especially true in Toronto, where the industry and others are raising concerns about affordability.
This is also where the HBP and other initiatives prove their value.
Through other measures, however, it is clear Trudeau is keeping an eye on the housing market, which is increasingly important given economic and affordability challenges in some areas.
Whether you’re a first-time buyer or an existing homeowner looking for your next home, there may be other initiatives in the future to help you realize your homebuying plans.