Federal Government Proposes More Help for First-Time Home Buyers in Mississauga


The writ has been dropped, and that means that Canadians will go to the polls on October 21 to cast their vote for Canada's next leader.

Whether Canadians will vote to keep Prime Minister Justin Trudeau in power is anyone's guess (recent polls show Conservatives favoured nationally, but trailing in seat-rich provinces such as Ontario and Quebec). But while there will be much talk of scandal and personality over the coming weeks, one issue should probably receive a disproportionate amount of attention: Housing. 

While it's safe to say the Liberals have gotten off to a rocky start (the SNC Lavalin affair is back in the headlines), the party might score a hit with the 905 voting block by announcing that it will, if reelected, work to ensure more Mississauga and GTA homebuyers qualify for its new First Time Home Buyers' Incentive (FTHBI) program.

At a campaign stop in B.C., Trudeau announced that the government plans to increase the value of a qualifying home from about $500,000 to closer to $800,000. 

He also said the government will implement a tax on foreign owners and speculators, a group that's been credited with driving up housing prices in Victoria, Vancouver, Toronto and the GTA. 

The announcement comes at a good time, as recent reports indicate that first-time homebuyers in Mississauga are not likely to benefit from the program as it stands today

As of now, the program will provide first-time buyers with interest-free mortgage loans of up to 10 per cent for new builds and five per cent for existing housing stock.

This will be done through the Canada Mortgage and Housing Corporation (CMHC).

As for how it works, Canadians who want to buy a new home for $400,000 can apply to receive $40,000 in a shared equity mortgage (10 per cent of the cost of a new home) from the federal government, lowering monthly expenses and the amount they need to borrow.

According to a recent Zoocasa blog post, the FTHBI doesn't really help GTA buyers in its current form. 

“New analysis from Zoocasa reveals that the FTHBI may be an option in the majority of the nation’s major urban centres; a study of July 2019 average prices in 25 markets across the nation finds home buyers with the maximum income of $120,000 and a 5 per cent down payment could feasibly qualify for the Incentive in 19 cities,” reads the blog post. 

“These include markets in Eastern Canada, Quebec, and Prairies, as well as smaller urban centres in Ontario.”

However, there are six markets where the average home buyer would not qualify for the incentive. These markets include the Toronto market and several markets within the Greater Golden Horseshoe area. 

In Mississauga, the average home price sits at $732,549—more than $200,000 over the $500,000 threshold. 

Trudeau acknowledged the affordability crisis during his speech. 

"People can't even imagine buying a home. Owning a house should be a realistic life goal. It's where you set down roots and raise a family. But young people hoping to buy their first home like their parents did a generation ago are facing a tough housing market," he told observers and reporters.

"That's why we launched a new First Time Home Buyers Incentive which provides Canadians with up to 10 per cent off the purchase price of their first home."

If the government offers the program to those looking to purchase a home closer to $800,000, more people will benefit—and likely appreciate the help. 

Trudeau also said that his government will, if reelected, implement a tax on non-Canadians who own homes in the country. 

"A lot of people are still struggling in places like Victoria or Vancouver where house prices have escalated due in part to speculators and foreign buyers. We’re also sending a message that Canada is not a place for those who wish to speculate in the housing market."

To tackle the effects foreign speculators are having on the affordability of homes in Canada's biggest cities, Trudeau says the government will also introduce a modest 1 per cent annual tax on residential properties owned by people who are not Canadian or who do not live in Canada. 

He says that tax will be on top of local taxes already in place (such as the 15 per cent tax that was levied on foreign buyers and speculators by the previous Ontario government).

Trudeau says Canadians living abroad will not be affected by the tax. 

While recent reports indicate that foreign ownership isn't quite the boogeyman it's been made out to be, recently released data from StatsCan suggests many Mississauga condos are owned by people who do not live in them (which means many are investment properties, although they could very well be owned by Canadian citizens).

According to the data, 35.6 per cent of Mississauga condos are not owner-occupied. Stats Can says that of the 37,920 condominium apartments in Mississauga,13,500 are either vacant, occupied by tenants or used occasionally as secondary homes.

The data was collected by StatsCan for its relatively new Canadian Housing Statistics Program (CHSP), which tracks housing data in Ontario, British Columbia and Nova Scotia.

Data released by the CMHC in 2018 indicates that the share of condos owned by non-residents remains low in the cities the corporation surveyed, with the majority reporting shares of less than one per cent. As far as the overall GTA goes (which, of course, includes Mississauga), foreign ownership shares sit at 2.3 per cent.

But while it remains to be seen what issues will really resonate with Canadians this election, it does seem wise for the Trudeau government to emphasize its FTHBI program and promise to increase it to benefit GTA residents. 

It also doesn't hurt to reassure Canadians that the government is watching speculative activity and working to level the playing field.

"We want our markets to stay stable and affordable," Trudeau said.

So do Canadian homeowners.

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