Federal Budget 2024

Federal Budget 2024 helps home buyers and renters

Budget 2024 highlights

The Canadian government has announced a comprehensive set of measures in the Federal Budget 2024 to address the housing affordability crisis and improve access to affordable housing across the country. Here is an overview of the key initiatives:

• Effective April 16, there are significant updates to the Home Buyers’ Plan (HBP) in Canada. Home buyers now have the option to withdraw up to $60,000 from their Registered Retirement Savings Plan (RRSP) for a downpayment, an increase from the previous limit of $35,000. This federal program allows Canadians to withdraw funds tax-free from their RRSP to purchase or build a qualifying home. The borrowed amount must be repaid within 15 years. Additionally, home buyers now have five years before they must start repaying the borrowed amount, compared to the previous two years. This extension applies to withdrawals made between 2022 and 2025, offering more flexibility for repayment.
• The Home Buyers’ Plan complements the government’s Tax-Free First Home Savings Account, which permits Canadians to contribute up to $8,000 annually towards their first downpayment. The lifetime contribution limit for this account is $40,000. These updates aim to support first-time home buyers and enhance affordability in the housing market.
• Starting August 1, 2024, first-time home buyers purchasing newly built homes in Canada will have the option to amortize their mortgage over 30 years, an increase from the previous limit of 25 years. This change provides home buyers with greater flexibility in managing their mortgage payments and affordability.
• The Canadian Mortgage Charter introduces permanent amortization relief for eligible existing homeowners. This relief allows homeowners to reduce their monthly mortgage payments to an affordable amount by extending the length of time for repayment.

Budget 2024 also includes

Funding for Affordable Housing

• Affordable Housing Fund: $1 billion over three years to create new market and below-market rental housing, as well as to repair and renew existing housing.
• Apartment Construction Loan Program: $15 billion in new loan funding to expedite the construction of rental apartments. This program provides low-cost financing to home builders to increase the supply of rental units.
• Canada Infrastructure Fund: $6 billion over 10 years to accelerate the construction and upgrading of housing infrastructure, including water, wastewater, stormwater, and solid waste infrastructure.
• Housing Accelerator Fund: An additional $400 million to help municipalities streamline processes, fast-track home construction, and invest in affordable housing. The fund has already facilitated the fast-tracking of over 750,000 homes, with the new allocation aimed at fast-tracking 12,000 more homes.
• Modular Homes: $50 million over two years to support local innovative housing solutions, such as designing and upscaling modular homes, through Canada’s Regional Development Agencies.

Support for Homeowners

Secondary Suite Loan Program: Homeowners can access up to $40,000 in low-interest loans to add secondary suites to their homes for new tenants or family members.

Tenant Protections and Rights

• Canada Rental Protection Fund: A new $1.5 billion fund administered by the Canada Mortgage and Housing Corporation (CMHC) to protect the stock of affordable housing. This includes loans and contributions to support affordable housing providers, such as co-ops, to acquire units and maintain stable rents.
• Renters’ Bill of Rights: A new framework developed with provinces and territories to enhance renters’ rights. It includes requirements for landlords to disclose rental rate history, crack down on renovictions, establish a nationwide standard lease agreement, and give renters more agency.
• Renters’ Credit for On-Time Payments: Amendments to the Canadian Mortgage Charter to ensure that rental history is considered in renters’ credit scores, calling on landlords, banks, credit bureaus, and fintech companies to incorporate this information.
• Tenant Protection Fund: A $15 million fund for legal aid and tenants’ rights advocacy organizations to protect tenants against rising rent payments, renovictions, and poor landlord practices.

Rapid Housing and Land Development

• Rapid Housing Initiative: A $1.5 billion fund to expedite the construction of new affordable homes for people experiencing homelessness or severe housing need. The initiative also supports the purchase of existing buildings for conversion into permanent affordable housing units.
• Building Homes on Public Land: Repurposing vacant or underused public lands, such as empty office towers or low-rise buildings, for housing. The government is conducting a review of its federal lands portfolio to identify more potential housing sites, including Canada Post properties and National Defence lands.

Addressing Financialization of Housing

• Restrictions on Corporate Investors: Intention to restrict large, corporate investors from purchasing existing single-family homes. Consultations will be held to develop further details.

Green Affordable Housing

• Canada Greener Homes Loan Program: $458 million for low-interest loans and grants for energy-efficient retrofits of affordable housing. This initiative aims to reduce operational costs for non-profit housing providers.
• Oil to Heat Pump Affordability Program: Over $750 million to support low- to median-income households in transitioning from expensive heating oil to more energy-efficient and cost-saving electric heat pumps.

Check our other blogs under Real Estate 101 – that might give you answers about buying or selling a home.

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