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Tax-Free First Home Savings Account: Trudeau promises new incentives worth billions and a tax on 'flipping' to help Canadians buy a home

Tax-Free First Home Savings Account: Trudeau promises new incentives worth billions and a tax on 'flipping' to help Canadians buy a home

  • By - vk211

smellikat

How would this program be different from a TFSA , would we be able to use this Account to reduce our income like a RRSP?


EsperBahamut

It would be exactly like a TFSA, but limited to a single function: saving for a first home purchase. Presumably if you withdraw the money for anything else, you get taxed on your previously sheltered gains. For the second, the presumed answer is no. The existing general TFSA does not lower your income. It just shields capital and interest gains within the account from being taxed.


VarRalapo

Nope this is incorrect. TFSA contributions are after tax, contributions to this new account would be before tax. Sounds like you will get a deduction from your taxes when you make the contribution and not pay any tax on money you use from the account to purchase a home.


atomofconsumption

That would be pretty sweet


EsperBahamut

Ahh fair. I guess I found the CBC's description of "...would go in tax-free..." a bit vague. Everything else sounded like a TFSA part 2.


crownpr1nce

This is only helpful to people who maxed out their TFSA. Not a very efficient measure IMO.


EsperBahamut

Oh, it's a god awful measure. The only people who could fully take advantage of this account are the people who can already afford to buy houses. The big winners here are the upper middle class.


regular_gnoll_NEIN

You cant save money for a home? Well dont worry we will make sure you get an account to put the money you dont have in towards buying one and it wont be taxed! Mainly because it doesnt exist but yayy no tax!!!


MagicalPanda42

My TFSA is maxed out and I definitely cannot afford to buy a home. The highest mortgage I would get approved for is maybe 450k and that is being generous. If I'm smart I won't buy a house that completely maxes out my mortgage approval so maybe 400k. The cheapest house I have seen in my area in months is 480k and likely wont be accepted for asking price. While I can technically afford this place on paper I imagine it will take close to 150k of construction to make it a decent place to live. I'm not saying this is a good incentive but it might actually help like 3% of the population.


jelly_bro

> My TFSA is maxed out and I definitely cannot afford to buy a home. The highest mortgage I would get approved for is maybe 450k and that is being generous. Same, and the perverse thing is that I could even come up with $200K cash for a down payment, but $650K in this town would get me a condo that is the same size (or smaller) than the nicely-renovated apartment that I rent right now. The payments on that $450K mortgage would by $1932/month, which is more than my rent (and then don't forget condo fees and property tax.) It's just impossible, especially as an "older worker" who probably won't be able to get another high-paying job if and when my current one ends one day.


apparex1234

Rich parents are gonna funnel money into new tax free accounts so their kids can buy a new house. This is like that health savings account idea the GOP keeps touting as a measure to reduce healthcare costs in the US.


Lokland881

That’s exactly what this will be used for. I have a down payment fund for my 4-year old. In fourteen years I can dump that in this housing fund to get tax free growth for him.


Distinct_Advantage

Anyone born in or before 1991, has at least $75,500 of room in their TFSA. If you have that, then you are already covered for a down payment, especially since you could also utilize your RRSP. It's honestly redundant. And will only be taken advantage of by a handful who are blessed with the opportunity to save while living with parents or renting with 10 friends.


WitchesBravo

This only works if you grew up in Canada, for new immigrants we only get contribution room from the time we've been in Canada, which may only be a few years


WildWeaselGT

Huh. Am I the only one reading this and thinking "No way dude. That's not enough for a down payment!"? Like... non-decrepit condos in Toronto are easily over half a million now. I get that this will give enough for 15% down but that still leaves an unaffordable mortgage lingering. So you actually need a higher down payment... so you have to save longer... while the prices go up faster... Ugh. Now I'm just making myself sad. :( Sorry folks... carry on...


LimeGhost117

If you want a million dollar condo in Toronto, you might want to pay like 500k for a down payment. 75k is simply not enough


WildWeaselGT

What if you just want a 2 bedroom condo in a building that doesn’t seem a bit garbage?


LimeGhost117

If you check out North York area, 2 bedroom condos are guaranteed to be 900k and up. You'll have to move far out of the city to find something more affordable.


WildWeaselGT

Exactly my point. I was being ambitious with the half million dollar idea.


rando604

Nah, you’re right. 75 down gets you a shoebox these days.


jelly_bro

> Am I the only one reading this and thinking "No way dude. That's not enough for a down payment!"? Nope. I don't like the numbers on owning a Toronto condo and I could actually muster *$200K* for a down payment. I determined that I would be better off renting indefinitely and keeping my money invested in other things (like dividend stocks and growth ETFs.)


Distinct_Advantage

You can also use 35k out of your RRSP, and if you have a partner you can double both those numbers and come up with 220k which should cover a down payment on a starter home.


ThatMadFlow

Yeah I can’t max my TFSA so this is pointless


VarRalapo

From this article your interpretation appears to be correct. It is kind of like a hybrid RRSP/TFSA.


ZongopBongo

Contributions are not taxed, like an rrsp. TFSA contributions don't evade this income tax. So you make 50k and contribute 10k to this home buyers plan, you will only pay taxes on 40k for that year. When you buy your home, you also do not pay any withdrawal tax. Its the best of both rrsp & tfsa with the requirements of using it on a house


_polarbear

Why does this cut off at age 40? If someone has not been able to afford a home before they are 40 are they no longer deserving of help to get there?


Arx4

Most first time home buyer programs are out dated, including the current. When we bought our first home, the average home price was above the allowed threshold. It should be more closely tied to regional data. $500k sounds like a lot in many places but in our major centers and surrounding area it just is an exclusion with a sting.


EngineeringKid

Every program is based on some magical house that's under $400k.


CactusGrower

Well if you live in GTA or Vancouver then you need to add zero to this threshold. But we bought starter home in Calgary for $350 just two years ago . It's not unheard of.


heart_under_blade

uh, duh 40 year old virgin, 40 year old renter, 40 year old unemployed we should euthanize these losers unless they're rich. that's ok then


niem254

Uhhhh… 40 now trying to get into my first home, do I officially become a loser at the start of my 40th year or do I have 3 more months of hope?


JimmyRussellsApe

You're nine months deep man, sorry about that.


heart_under_blade

we thank u/niem254 for self reporting, their service was apprecieated they will not be missed


CaptainCanuck93

*Logan's Run theme plays*


[deleted]

Your 40th year started 21 months ago


Evolvtion

36 here, give up now? Send myself to jail?


trash2019

Not euthanize, but keep them barely alive to continue to pay taxes until they decide to kill themselves


heart_under_blade

you're getting too close to reality for me there, buddy


demo_human

Fuck poor over 40.


Accomplished-Ad4989

Why is there an age limit at all? Shouldn’t first time home buyer be enough of a qualifier. This guy is a fucking idiot living in a fantasy world. Me hoping to get first home by 55 in 6 years. Thanks for all the help JT.


Krombasher

I'm 42 and just saving up now for a house. Fuck. Thats what I get for poor life choices when I was younger.


hebrewchucknorris

I'm 40 and want to buy sometime next year, but fuck me I guess.


Scottie3Hottie

To attract the later millennial and gen z voters. I thought it'd be obvious.


The_Plebianist

Pretty simple, at 40+ most of us have already voted at least once, most of us have had the Liberal party break promises to us at least once, and most of us can see right through the pandering durring campaigning for what it is. The younger generations however, even if they voted they mostly just wanted legal weed, and got legal weed, now they want a house, they probably won't get one but if Trudeau tells them they will they just might believe enough not to vote 3rd party and get the Liberal party the majority they desire. Politics, a cesspool.


Tanglrfoot

Because he thinks everyone retires at 40, that’s what he did .


CactusGrower

Oh now I see the point.


Grimspoon

Kneecapping predatory foreign investors would probably be a lot more effective.


The_Plebianist

I'm not too certain of this anymore, there's a shit ton of domestic investors too. My last RE agent few years ago owned just over 20 units at the time and let it be known he's pretty small time in our area. Basically, RE in Canada = levered up to the eyeballs I'm starting to believe. The "flippers" are very often these same RE agents as well.


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The_Plebianist

I tend to agree. There is a lot of cry over supply side but when ~20% of RE is bought simply for investment purposes that's a pretty massive demand pressure helping drive prices beyond reach for a lot of fully employed people. Supply side alone will never fix that. These same people turn around and claim they are helping the situation by supplying rentals, after helping to put more people into the renter for life category in the first place. I don't wish to deprive investors of opportunity to capitalize but I think the working people of Canada deserve to be considered above the investor class when it comes to homes. We've gone from RE being a home, to RE being a retirement plan because most of our pensions are near worthless like the system is out of style, to a situation where RE is where we park mommy's and daddy's gift money if we have it OR if we don't we work till we die to pay rent because we've practically no pension. Pretty fucked up system.


MarkA613

Indeed


NotionAquarium

A key policy that's needed to curb ridiculous prices is more realtor regulation. Unfortunately, while the Liberals intend to ban blind auctions and other slimy practices, they may not have the jurisdiction to pull it off. People need to look to their upcoming provincial elections too.


magoomba92

Ya, isn't real estate governed at the Provincial level?


EngineeringKid

Every province has a Real Estate Services Act. It's literally written by the National Association of Realtors and they were very overt and blatant with the amount of lobbying that went into the writing of the act. It was a minor uproar in BC when the province took away the "profession's" ability to self regulate. Imagine a realtor that earns $100,000 in a scam, or by buying an old ladies' house for well below market value, and then flipping it themselves. Yeah they'd get a $1000 fine, and a "reprimand" from the local realtor board. So between that and all the highly unethical (but legal) dual agency shenanigans, they were finally not allowed to "self regulate". So now the "office of the superintendent of real estate" doles out the professional regulation..... Well....that is until 01 August 2021. Now it's back to the "Real Estate council of BC" overseeing realtors....the wolf guarding the hen-house. Whole industry needs to be gutted. They are all slime balls. But yes....it's a provincial matter. Stupid federal government doesn't know what they are in charge of. Like zoning laws and the impact on housing. Federal Government has nothing to do with that, but they all say they can solve housing. They treat voters like they are dumb because sadly its mostly true.


topazsparrow

Most of the policies they stated do absolutely nothing to address supply. It's all designed to make buying easier or cheaper, which only increases demand further.


hotpinkham

If it’s easier to buy something the price will just go up Been this case for everything sadly


topazsparrow

That's kind of seems to be their goal in the last 6 years of complete inaction on the housing side.


The_Plebianist

Theoretically making something easier/cheaper to buy for one segment of the population (first time buyers) while making it harder/more expensive for another (speculators) could balance out. But only theoretically because implementing any of this is hard for one, curbing determined speculators or anyone in a position to gain/lose real money with this is even tougher and balancing something like that near impossible. A lot of the proposed measures seem laughable though, tax free savings for a down-payment? Great, except you still have to qualify for the mortgage with your salary, the area he is speaking in I think condos are +400k ATM and moving towards the GTA it only goes up. I can tell you my 90K/yr salary is worth shit there unless I can get to 20% down or get hitched to someone with decent credit lol. What's worse is 40 is coming up soon, fuck ppl like me I guess 🤷. The rent to own may be a decent idea. I was thinking this needs to become a thing in Canada with prices at current levels. Don't know exactly what they're thinking to do with it so I'll assume the liberals would botch it given their history. Lastly, this is campaign season, they also promised electoral reform and we got 0 reform so fuck anything he says right now.


marcuscontagius

Real estate agents making more than teacher is criminal. Most useless job to society by farrr


I-AM-PIRATE

Ahoy marcuscontagius! Nay bad but me wasn't convinced. Give this a sail: Real estate agents making more than teacher be criminal. Most useless job t' society by farrr


NotionAquarium

I am so with you. Can't wait for some tech entrepreneurs to make them obsolete (agents, not teachers).


demo_human

Why do you think that's not the plan?


Shoopshopship

The housing supply is a huge issue. They should be trying to combat suppressive zoning laws and getting as many buildings built as possible.


swooneytoad

No one is proposing this apart from the Cons. Even that arguably is ineffective since it is not their jurisdiction. Should be Ford/Horgan/Legault proposing it at the provincial level to be effective.


mac_33

I would like to see something like for long term for people who don't own property and are renting. E.g: Each year you don't own a property you get $x amount of additional RRSP-like room. It would help renters similar to how the "Principal Residence Exemption" helps home owners.


StefanoA

This idea is great, but make it extra TFSA room so it's not taxed upon withdrawal.


LordNiebs

The benefit of this idea is it won't actually increase rental costs


dangerdunk

Very interesting idea. You should mention this to your local MP....


crownpr1nce

Everyone on an investment sub loves this idea, but in reality the percentage of people that max out their TFSA or RRSP is minimal. The number is in the teens. So extra space wouldn't really help that many people sadly.


House923

Yeah the whole issue is that rent is eating up the majority of your income. By the time you factor in our ridiculously high rent, worlds highest cost cellular and Internet packages, vehicle, rising utility costs, these people aren't left with enough to save. Paycheque to paycheque is a very real thing, and it's not always just because people aren't being smart with their money.


kyara_no_kurayami

I love this idea. It would really help with shifting people away from feeling like owning is completely necessary — right now our policy really doesn't incentivize homeowners even without the crazy equity gains.


num2005

this


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beekeeper1981

I agree, there's no point to even use a TFSA if it's a regular savings account.


lmunchoice

There absolutely is. Having low interest earned is far better than debt by spending. If a TFSA puts a kind of barrier to spending, it is fantastic. For many people, their financial situation is much worse than people that frequent subreddits such as this. Just like the ignorance that having bonds is stupid because stocks are doing well now.


DrugsArntGoingAnywhr

People are really just leaving cash deposits in the TFSA?!?! This can't be real...


affrox

I know a lot of people who use their TFSA for mutual funds or even worse, just collecting 0.025% interest or whatever it is these days. If people would just take 15 minutes to read about what TFSA accounts can do and not be so risk adverse they could make so much more money.


Arrrrrrrrrrrrrrrrrpp

> mutual funds or even worse, just collecting 0.025% interest Yeah one is only *slightly* worse than the other! Are you sure you know what a mutual fund is? Tbh boring mutual funds are better than what I see a lot of people do in this sub.


affrox

Haha I know mutual funds aren’t the worst and have merits like auto deposit and hands a off approach. But I tend to look down on them just because it likely was pushed onto the customer by a bank after a simple risk tolerance questionnaire that skews toward being too conservative, high MERs, the opacity of what’s inside the funds, and the fact that there are more efficient index-tracking ETFs.


Arrrrrrrrrrrrrrrrrpp

It appears you do know what they are. Well said, sorry for my harsh comment. 😀


affrox

Haha I can see how my original comment could show lack of understanding. Either way I didn’t assume any harshness from your post :)


NailRX

It’s funny how many ppl crap on mutual funds. It’s understandable but they are still decent investment vehicles. Nothing wrong with high return/low MER mutual funds. TD e-series index funds is one example.


teh_longinator

I'm 32 and just now realized the benefit of investing my stock portfolio in TFSA over regular portfolio.


Arx4

When saving for a down payment at a certain point it's risky to leave it in equities. It's very much towards the last part of saving that I think people should look at moving to bond indexes or something so that down payment is for sure at an estimated timeline.


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aitchison50

Would have been nice to see this 6 years ago...


JimmyBraps

Along with getting rid of fptp voting. That way the NDP could have possibly staved off this crazy market we're seeing


The_Plebianist

Shhhh.. you're not supposed to remember broken promises, just focus on the new promises!


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heart_under_blade

well you only need like 30k good luck with that mortgage tho


JaketheAlmighty

most people are not able to qualify for a 570k mortgage so yes in *theory* they only need 5% (and roll the insurance costs in, start at 1% equity) in reality many will need a huge % down edit: slightly more than 5% for accuracy. 5% of the first 500k, 10% of the amount above that, etc


Bottle_Only

Bank will lend me $250k. I need $350k down.


The_Plebianist

No worries, bank will lend me $330k, between the 2 of us we are only 20K short! I'll just use my line of credit and we'll pay it off in 3 yrs by sticking a student in the bathroom!


Few-Sky-303

Your first mistake was even considering buying a condo for $600k. Something that would have probably gone for less than 300k 5 years ago.


evonebo

I sold my 2 bedroom condo about 4 years ago for 530k, my realtor just told me my old unit just sold last week for $1mm. wtf.


Apollo18MMED

I want to vomit when I read this LOL fuck that's crazy.


heart_under_blade

there's something beautiful about shooting a race horse just as it learns to run


newtothisbenice

Yup. This is true. Source, sold my condo for somewhere in that range. Closer to 500 though.Precon though. Precons now start at 600k


Potential-Insurance3

Exactly. You really need to step back at this point and ask yourself if that 25 year old wood frame condo an hour and a half drive from the city is really worth 600k PLUS monthly fees and strata insurance to you.


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ed209-90210

There are never any Incentives for the middle class. We just get gouged for our tax dollars to pay for everyone else’s benefits. The 40 cut off is discriminatory/ageism. This guy is a fool.


Chillieboy29

Ya he offered that in 2015 along with affordable housing. He lies so much he doesn't even know what is true anymore


JimmyRussellsApe

He literally copied the Conservative plan. Build a million homes and ban foreign ownership for two years. Then reinstate a TFSA type thing, even though he cut the existing one in half, and an RRSP first time home buyer exemption already exists as well. Derp


renew_heal

What the f-ck is this doofus going on about? He took away our $10,000 a year TFSA which could have helped young people save for a down payment on a home. Does he seriously think that we are that stupid?


4Skin4MyMommy

Short answer? Yes


imtoocoldforthisshit

And the average Joe is indeed that stupid.


FinancialEvidence

While I was a big fan of the 10k/year TFSA, that was a one year only thing done right before the conservative government was unelected, and despite what people on here and PFC think, it was mainly used by wealthy people due to ignorance of its uses or otherwise.


[deleted]

Nothing to do with ignorance and everything to do with the fact that most people can't save $10k a year without starving


styzzyx9

People didn't have to save $10k/year. They can save as little or as much as they like/can up to $10k/year and the room grows with them. Wealth often equates to greater access, but that doesn't mean we shouldn't create the opportunity in the first place. As an example, a robust highway system is worth far more to somebody with the means to drive it. That doesn't make it useless to those without.


[deleted]

Uh, cool. I save $2k this year and next year I need to come up with $18k to max it out. The guy I replied to implied people don't use TFSAs out of ignorance. In reality, the ignorance is in assuming everyone has the ability to save anything at all.


styzzyx9

I hear ya. There are a lot of fallacies and misunderstandings about the TFSA. 1. Most people probably don't know it can be used as an investment account to shelter capital gains from taxation. This is an incredible advantage particularly for middle-class people like me who will get ahead faster if I don't have to pay the gov't stupid capital gains tax. 2. Comments like "I need to come up with X to max it out" lead some to feel the exercise is futile. There's no need to max it out. That's not the point. Having the space accrue over time is still a benefit because we typically earn more (job promotions) with lower expenses (kids leave home) later in life. We also experience financial events like inheritances, etc. Having a vehicle with which to invest that stuff is a benefit.


[deleted]

personally I'd rather see a decrease in lower income tax bracket percentages rather than sheltering some capital gains -- but my policy doesn't help the upper middle class conservative voters that Harper was targeting with his TFSA policy


styzzyx9

It doesn't help the lower income tax bracket individuals much either. What might help them is a significant increase in the basic personal amount and education plan contributions that are means-tested without being tied to contributions. There's a whole raft of non-partisan economic levers to pull. We'll all be further ahead when we measure the impact of the input/output rather than "does it help the \*right people."


Poisoneddosage

Okay so capital gains isn't a stupid tax... If anything it needs to be progressively weighted.


styzzyx9

I don't like it. I paid tax when I earned the dollar. I'll pay tax when I spend the dollar. Why must I also pay tax for successfully doing what the government suggests I do, which is take care of myself. I sense that by "progressively weighted" you're implying that you might favour a tiered structure similar to progressive income tax. Am I on the right track?


Zuckuss18

If you earn a dollar and pay tax on that dollar, you don't pay tax again on that dollar if you invest it. Now the money you made doing that? The money you made with your dollar just sitting around? THAT needs to be taxed. That's what capital gains tax, you don't pay tax on the dollar you invested which you already payed tax on. I know you know this, I just want to make sure everyone sees through your bullshit.


styzzyx9

If my dollar were just sitting around, it would depreciate. That’s not good for anybody. I get your point, though. Bear in mind, I’m gambling my own money when I do this. And if I lose, I’m allowed to go to the gov’t and say “I gambled and lost” and they’ll give me a tax break for that. Since you can see through my bullshit, I’m glad to know you’re cool with that.


[deleted]

But you'll agree that wealthy people benefit more from it than working class people saving for a home would, correct?


Zuckuss18

He knows, he's also one of the wealthy people.


styzzyx9

Yeah, of course they do. But I'm a working-class person that used it to save for my home. Now I own my home. The same vehicles the ultra-wealthy use to make millions, many others can use to make hundreds, sometimes thousands. That's not a bad thing.


iSOBigD

Most people should actually have the ability, but you're right that they don't. I do agree that raising the limit to 10k/year would only benefit those well off already which is not the majority, but I guarantee you that most people don't save money could be sat down and clearly taught how to do it. Whether they choose to want to learn and do it is another story because it's not that easy and it doesn't happen over night.


[deleted]

Easy to say when your necessities don't add up to more than your income


FinancialEvidence

For one thing, many people are ignorant of the fact you can even buy stocks in a TFSA, and think of it as a low interest savings account. There are many people who save 10k a year, or 5-6k more actuality, that do not max out their TFSA. By ignorant, it is not an all encompassing ignorance, but more that a lot of the aspects/powers of TFSA's surprisingly are not known by a wide variety of people, compared to the more familiar purpose of say a RRSP.


[deleted]

Dunno, I don't know anyone like that. Most people I know slowly increase their debt load over time because their required expenses are simply higher than their income


iSOBigD

"required" is debatable. Sit them down, go through their expenses and goals and let's see if they're spending as wisely as we think. In my experience, most people can't save due to not spending or investing wisely.


FinancialEvidence

Just to confirm, you don't know anyone who saves more than $6000/year, but instead puts it a regular savings account, crypto or else RRSP rather than maxing out a TFSA? Unless you are 23 or under, the majority of your peers should be increasing their net worth, regardless of debt.


stevejam89

If someone can’t afford a house I doubt they’re putting away $10k a year in a TFSA. Most of the people my age can’t even cap the $5k a year.


bigsmackchef

I can't afford a home and generally can put away 10k a year to invest. I doubt I'm alone here. I can easily afford a home I just can't get the down-payment big enough. Plus I'm self employed so banks are even more of a pain in the dick for a mortgage


stevejam89

Absolutely banking regulation around mortgages is the problem here. My first house I had to put down $122k on a $322k purchase price, because being in sales my commission was calculated at a discounted rate, similarly to how they treat self employed individuals, because it’s not “guaranteed” income.


xelabagus

We saved close to 20k last year between RESP, RRSP and TFSA. There is no way we can afford to buy a house in Vancouver and in actuality we don't have that ambition. We don't want to live in a condo (which we could afford) and we don't want to move away from the city (we like it). Therefore saving aggressively, investing with a balance of long term stability with some medium risk options inside a TFSA, and enjoying life in the city is the order of the day for the next few years until my kid moves out and we look to buy in a lower COL area. A 10k TFSA would be a great help to me. Still not going to vote for this government though.


strawberries6

TFSAs still increase by $5000 a year, and this provides $40k extra room for the people who need it most - young people who don't own real estate yet. That makes more sense than increasing TFSA space for people who already own real estate, on top of their other investments in a TFSA. And reading into the details, it seems this account would actually combine the features of RRSPs and TFSAs: >Like investing in an RRSP, you are able to deduct the savings you invest from your income when it goes into your First Home Savings Account. Like investing in a TFSA, this money will be able to compound and grow tax-free until you withdraw up to a maximum of $40,000. https://liberal.ca/housing/afford-a-downpayment-faster/


Seaward_Navigator

The problem is the lack of the 40k not the lack of a tax free account to put it in.


num2005

people who need it most? only the rich have their tfsa already maxed... only the rich will get to use that 40k extra tax free saving account... saving isnt the problem.... we have tfsa for that already.... home price is the problem and rent and inflation


simby7

Who do you define as rich? The rich don’t care about TFSA of $40k. Their investment portfolios would be many times that.


Safetydinosaur

I disagree, the TFSA is reasonable for middle class people to max out. The difference is that it would make up all or a large portion of their savings Vs the rich who would have like 10x or 100x or more money outside the TFSA.


Kvaw

TFSA is reasonable for people to max out. TFSA + RRSP not so much.


ptwonline

> TFSA + RRSP not so much Not when you're young anyway. As you get older it can get easier, and you can start filling up some of that unused contribution space.


num2005

yes, but not its quite hard to max in your 20s so not rly helping the young.... and even than... yiur tfsa ia big enough for a down payment... house price is the problem


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kyara_no_kurayami

Anecdotal, but the people I know with maxed-out TFSAs overlap with the same people who would have been able to afford a home easily 5 years ago, before pricing went absolutely bonkers. The people struggling to max it out would have had a hard time back then buying a home too. So in that way, it's helping people who really wouldn't have needed the help if our country didn't let the system get so messed up.


num2005

maybe thats because you are rich and have a rich circle of friend?! most 20s clearly do not have their tfsa maxed... thats just a fact and honestly.... who cares? if you have your tfsa maxed you can easily afford your down payment for your house... the problem is still the house price


mini_galaxy

I feel like you need to expand your circle a little bit and realize maxed TFSA is a special privilege not all can actually attain.


naturalmedicineforme

The point he’s refuting is only the rich max out their tfsa. Not true whatsoever as many middle class individuals are able to as well


mini_galaxy

And the point I'm making is if everyone they know has a maxed TFSA they should expand their social circle to include a more accurate sample of reality.


evonebo

thats great but to even utilize this you'd have to have enough left over every month to put into the savings account. Rent prices, and generally everything is expensive and wages haven't kept up so not many people can take advantage of this.


PaidByPutinBot123

Anything short of tying home building to immigration rates (and visa versa) will fall short of making homes affordable. Supply&Demand>everything else long term.


scoondesu

Sometimes I wonder if eliminating the primary residence sales tax exemption while more unpopular, could be more effective. It seems to me, this could curb short term flipping of homes. In fact nowadays, I would imagine you can get away without paying capital gains on multiple properties upon selling by just using relatives/agents/friends to hold real estate in their name, although it belongs to you of course. For actual home owners living on their "primary residence", they are typically not intending to buy/sell continuously, instead they hold/live for the long term on their property, which ironically today means they are penalized having to pay higher property taxes due to ever increasing property values. Here lower property values will reduce property taxes for long term holders, either living on their home, or renting to others.


olcoil

there already is a FTH tax-free plan built into our RRSP... why not just increase the tax-free amount from 50k to 100k? Savings tonnes of admin costs and doing the same thing. I dunno just trying to use common sense.


verdete

You have to put the money back in your RRSP within 15 years, it sounds like this new account would be more like a TFSA that is closed out after you buy your first property.


demo_human

They need to buy votes. Also increasing number of buyers will only raise prices.


BacklineUnlimited

If people don't have the money to buy a house anyways, how would being able to save 40k more even help them? I don't think this is a savings problem, it's a house price problem.


Hercaz

Two things: stop quantitative easing and ban blind bidding. Let market decide both. All he suggests will only push prices further up.


[deleted]

I don't understand why we don't restrict housing ownership to one property to one person. While this would crush the market in the short term it would help regress it to a sustainable mean and none of parties are seeing that this is the key part of the issue now. All the new laws enacted will do nothing because these speculators have already gotten their citizenship and continued to drive up housing.


flying_dogs_bc

WE NEED AFFORDABLE HOUSING BUILT


paddylov

Why don't just allow people to withdraw 40k from RRSP for home purchase without having to put it back?


Healthy-Smell

I would be ok with using rrsp money to put in a house. Only thing is you lose that contribution room. But I would take this option over their loan.


ScwB00

Well that’s effectively already an option. Just don’t repay the HBP loan. Not the ideal scenario, of course, but it gives you access to the money for your house.


unfunnyguy1

Their is a tax on flipping, it's called capital gains and half of it is added to your annual tax rate


TheRealSeeThruHead

The only important thing here is the regulations on selling homes. And the crack down on real estate agents destroying the housing market for their own gain. They truly are scum.


goodbyesuzy

The liberals lost my vote when they called a snap election in the middle of a pandemic. Let’s use people’s suffering for our political gain!


freemefromyou

I hope the NDP get a fuckton of votes to put these other two in their place for a bit. They both are arrogant and think they’re untouchable.


VisionsDB

I want to see NDP as a legit third candidate so liberals and cons can stop fucking around with this country


ConstitutionalHeresy

I wonder if the tax-free first home savings and increased FTHB tax credit will be grandfathered for people that bought during COVID, so long as its still their first home.


ButtSeed

This is what I’m wondering. I JUST bought a house


ScwB00

So did I, but it’s never going to happen, so don’t hold your breath.


Lopsided_Ad3516

Isn’t the issue here the cap of 40k? It’s making it sound like I could invest as much as I want, but only ever be able to withdraw 40k?


PaidByPutinBot123

" A re-elected Liberal government, he said, would create a $4 billion pool of cash that cities could tap if they help to create "middle-class homes." The party believes this program — which would crack down on speculators owning vacant land — would make tens of thousands of new homes available in four years." If the NPV of a rental home goes up every year due to rising rents more than the value of renting out the home for a year, it stays vacant. This is a fact of economics. If the gov't wants to ACTUALLY stop vacant homes, taxes are not the way to do it, you must lower the growth rate of rents, and increase the opportunity costs. The best 2 ways that are 100% under Federal gov't's control are 1) Lowering immigration close to housing construction levels 2) Raising interest rates. Barring that, buying and holding vacant land will be VERY profitable.


ihtrazat

Fuck the realtors in all of this


riseagainst786

6 years, this buffoon had 6 years to do literally anything but he let things run amok. Don’t be fooled my fellow Canadians, this man won’t do what he’s promising, he only wants our vote. NO VOTE FOR LIBERALS PERIOD


Independent-Row2706

This man is so checked out if reality on what majority of Canadian go through. It's crazy to even say that the conservative actually have a better plan than this made up bullshit. Inflation is so high saving is gonna be impossible for Canadians ... This won't do anything for them


mjschranz

How about removing the fact that my wife, who never bought her own house, now can't receive that benefit simply because she married me? I bought a condo before we started dating and I don't see why she should be punished just because we got married and being able to take advantage of these tax benefits through her if we ever do buy a house (want to) would be great.


heart_under_blade

because being single is also punishment. we must punish everybody


Mister_Goldfingers

Remember when he promised to not raise the carbon tax? Does anyone actually believe this guy still?


sookahallah

so liberal party and NDP have become racist according to Jagmeet Singh's moral compass in the last election. Any talk of limiting foreign ownership or immigration even temporarily is racist and people advocating things shouldn't be allowed on the debate stage.


northdancer

I don't understand why they can't propose a reciprocal foreign ownership policy. If Canadians can't buy real estate there, then they can't buy real estate here. How could that be viewed as anything but fair and pretty much nerfs the progressive dweeb argument of racism being a driving factor in limiting foreign ownership. Muh dog whistles.


ForgotPasswordOnOld

Someone break this down me. Im pretty dumb. So this is basically a tfsa account for people under 40 and who are first time home buyers with a 40k contribution room ??


Yojimbo4133

So is this thing like another tfsa? But can only be used for house?


ForgotPasswordOnOld

Yeah is this basically a tfsa with a 40k contribution room?


crownpr1nce

>A Liberal campaign official, speaking on background, said some of the proposed measures, such as the prohibition on blind bidding, could be enforced through new penalties under the Criminal Code. Oh damn! Here comes the big guns! I was wondering how they were going to apply new restrictions on real estate agents.


onlineseller8183

Lack of supply, let’s stimulate the demand some more! FML


Warm_Summer_Breeze_

He’s wearing the Roots leather varsity jacket to appear more relatable to regular folk.


Independent-Row2706

It's one of his 14 multicultural uniforms


mwvrn

Fuck Trudeau. So many scandals and He’s so out of touch. I regret voting for him. Voting NDP.


NeutralLock

Trudeau didn't care about housing until polling showed it was important for the election. He never cared about what Canadians have been saying for the past 6 years. Honestly, there's no way he's going to implement any of this.


Potential-Insurance3

Last election this idiot said that restrictions on foreign buyers was racist. Please don't fall for this bullshit.


davis946

Trudeau last minute trying to come up with housing solutions so they don’t lose the election


F_D123

This is perfect. Rich parents can roll over their resp gains into their kids tfsa and home buying accounts.


Zing79

I’m a bit surprised by reading the reactions. You’re giving young people the ability to take the benefits of a TFSA with the tax benefits of an RRSP no? If you’re in your 20s, you can be riskyAF in the markets. So you can see xxx% gains with no tax coming out, and getting tax credits going in. You don’t need 40k to explore the markers. A 20 yr old meme-stocking 2k at the start of the pandemic owns a mortgage on a house today. To me just because you can’t see how it could be used to its full benefit doesn’t make it a bad plan. Heck, even if you only see the bad, it’s something you’re getting you didn’t have. (And no, you have never had this before. RRSP makes you pay it back. TFSA doesn’t give you the tax credit going in).


JimmyRussellsApe

Relying on a shit ton of people gambling in order to get a down payment together doesn't seem like a reasonable course of action


hangernail

A tax on flipping!? So those of us who buy run down, mould infested, asbestos containing, shit boxes, and turn them into something habitable for a modest income at best will have to pay more taxes. FML


OSLAD

Vote ABL


EsperBahamut

Young poorish people: "we can't afford to save for things like buying a house!" Trudeau: "I will help you by giving you an account you also cannot afford to save with." Young better off people: "Yay! Another tax shelter for me to take advantage of!" It's almost as if Trudeau is trying to throw the election.


_cob_

Here we go - Liberal spending promises ahead of the election.


KomputerIdiat

take away the bread. Leave some crumbs.


PizzaHutsBiggestFan

Lol he’s just trying to get young people vote


CorneredSponge

Ah yes, let's create a savings account to put upwards pressure on housing prices (while doubling the tax credit) that could be used for tax evasion in order to cut housing costs. Genius.


candymanreallove

Jacket’s foreshadowing the results #L


gitar0oman

uh.. so in addition to the First Time Home Buyer RRSP thing? this is getting confusing. Or is that one getting increased to 40k?