Your Vote Can Shape Your Housing - Part 1 - The Liberal Party

Voting.


Sometimes it's something we all take for granted. It can also be very exciting for a first-time voter to cast their first ballot. But in a country, as polarized as us, it can be very easy to think your vote doesn't matter compared to the masses. But change has come from people doing what they feel is right and taking action. Voting is that first step.


I'd like to share with you some of the highlights of the different political parties with respect to housing. There is a lot of miscommunication and gotcha politics going around. My goal here is to provide you a clear understanding of how some of the proposed policies by each of the major political parties will shape how we see housing here in Calgary.


But as always, before we start, I'd like to introduce myself. I'm Aly, a real estate professional here in Calgary. I service Calgary and most surrounding areas (as far as Brooks!) and have been a successful agent for over 6 years.


So let's begin.


In this 3 part Breakdown series, I'm simply going to extract the three major party platforms with respect to housing and report them here. Each party has its pros and cons and I will add my commentary so you can have a boots-on-the-ground insight into how this would affect our Calgary and surrounding areas market.


The Liberal Party

The Liberal Party's platform is presented as a home for everyone. You can find their detailed platform by clicking here


In their plan, the first few points are centered around a $72 billion infusion of money to increase supply, make housing more affordable, and address chronic homelessness. In addition to this, they would introduce legislation to recognize the right of Canadians to access adequate housing, sign a Canada Housing Benefit agreement with the provinces and territories, in the amount of $4 billion to cost-match funding and help over 300,000 Canadians pay rent.


In terms of specific changes to homeownership, they will be introducing:

  • A new Rent-to-Own program, that will be designed to commit the landlord to charge a renter lower than the market rate to allow the renter to save for a down payment. This program will also get the commitment from the landlord to ownership for 5 years.

  • A tax-free First Home Savings Account that will allow Canadians under 40 to save up to $40,000 towards their home and withdraw it tax-free without a requirement for repayment.

  • Continue the First-Time Home Buyers' Incentive. This has been introduced already but is more flexible in that the equity portion can either be equity in the home or a loan amount with repayment.

  • Increase the First-TIme Home Tax Credit from $5,000 to $10,000.

  • Reduce CMHC premiums by 25% and increase the amount covered under the CMHC insurance from $1 million to $1.25 million

  • Establish an anti-flipping tax on residential properties requiring properties to be held for at least 12 months

  • Increase federal regulator powers to respond to housing price fluctuations.

Finally, they will be introducing a new Home Buyer's Bill of Rights, which include:

  • Ban blind bidding

  • Establish the legal right to a home inspection.

  • Full transparency on the history of the recent house sale price on the title

  • Require real estate agents to disclose they are involved on both sides of the sales.

  • Public ownership registry.

  • Ensure 6-month deferrals are provided by lenders in the event of job loss or major events.

  • Require mortgage lenders to act in buyers' best interest and be fully informed.

The Breakdown


As I was researching this, the first impression I got from it was the idea of more government into the housing industry. Depending on where you are in the spectrum, this can hurt or benefit you, especially if you are in Calgary or a province where housing prices are attainable for first-time buyers.


There are some great things in this breakdown, from the reduced CMHC fees and allowing for higher price points to get the insurance if needed. This allows for more flexibility and reduces the fees to CMHC, which in my opinion is way overdue.


Where I feel this platform is lacking is that how broad of strokes the Liberals are taking with increasing the regulator powers, the bill of rights, anti-flipping taxes, etc. This continues with the stereotype of how tone-deaf the party is to western Canada and the prairies, where most of the provinces do not have enough of a reason to have these types of changes. There is a definite need for some of these items, but they should be on a province-to-province basis.


For example, in Calgary, there are many investors that I work with that are leveraging living at home and purchasing investment properties. They are first-time buyers and have the ability to do this because of our softer pricing. Should these investors be penalized for their investments with an anti-flip tax?


Another example would be our suppressed market for the last 5 years. Now the market shifting towards sellers, should they not have an equal amount of power to dictate the transaction, like buyers do when we are in a strong buyers market?


The Conclusion


The Liberal Party of Canada has done some wonderful things for our country. In fact, I might not be here if it wasn't for Pierre Trudeau opening up Canada's borders to refugees in the 1970s. In terms of housing, they have some great plans to reduce costs. However, their overreaching regulations and taxes will hurt most of the prairie provinces going foward.


Perhaps a better solution would be to aid certain industries that don't need to be based in BC or Ontario with relocation credits to move their employees and office to parts of the country that are more affordable.


Thanks for your time today. Tomorrow we will be dissecting the Conversatives plan for housing and gain some understanding of how things might be different.


Take care, chat soon.

Aly





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