Liberals, NDP, and Conservatives release housing platform for upcoming federal election
Published August 20, 2021 at 4:18 pm
The next federal election is just one month away, and this week, the three major parties released their platforms on housing.
As part of their platform, the Liberal Party has pledged to invest almost $20 billion over 10 years in social infrastructure, specifically affordable housing.
The Liberals have also pledged to invest $125 million per year in tax incentives intended to increase and the supply of rental units across the country.
Additionally, the Liberals have pledged to implement a national tax on vacant residential properties owned by foreign investors.
“This policy would ensure that foreign-owned properties are available for rent, so it would help with the rental supply, however it would be unlikely to significantly reduce foreign demand to own Canadian real estate,” James Laird, co-founder of ratehub.ca and president of CanWise Financial mortgage brokerage, said in a news release.
The New Democratic Party (NDP) has pledged to build 500,000 affordable housing units, and at least half will be complete within the next five years.
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The NDP has also pledged to waive the federal portion of the GST/HST on the construction of new affordable rental units, which will allow them to be completed faster and stay affordable for longer.
In an effort to prevent foreign investors from driving up market prices, the NDP has pledged to implement a 20 per cent Foreign Buyer’s tax on the sale of homes to individuals who aren’t Canadian citizens or permanent residents.
“This substantial tax will reduce demand from outside of Canada, as long as it can be implemented effectively. This policy will slow home price appreciation,” Laird said.
The Conservative Party has an even more ambitious plan than the NDP—they have pledged to build 1 million homes over the next 10 years.
The Conservatives have also pledged to implement longer, seven- and 10-year mortgages, as well as removing the stress test from mortgage renewals.
“Longer-term mortgages provide more stability to the home buyer and lender. If seven- and 10-year mortgage rates drop, then more homeowners will choose this option. This will not affect the real estate market,” Laird said.
Additionally, according to Laird, mortgage stress tests allow lenders to charge higher rates because those with mortgages are inhibited from shopping for the best rate when their mortgage is up for renewal.
In an effort to prevent foreign investors from driving up real estate prices, the Conservatives have pledged to implement a two-year ban on anyone not living in or moving to Canada from buying homes.
“If this policy can be implemented effectively then it will reduce the overall demand for Canadian housing and slow home price appreciation,” Laird said.
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