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In the face of sharp budget cuts, the government will focus on housing, defense spending and health care in an effort to make life more affordable for Canadians while trying to control the level of spending on the epidemic.
The housing problem is not only a primary task for new immigrants when landing, but also a “big trouble” for local residents, especially young rigid demand groups. At a time when the federal budget is tight, the government will spend 10 billion Canadian dollars to solve the housing problem!
Of particular concern is the ban on foreign buyers, the C $40,000 tax-free savings limit for first homes, and the government’s new dental care program, which makes dental care free for children under 12 this year.
The finance minister highlighted the urgency of Canadian companies in recent years over the government’s high deficit spending, which increases the deficit for the current fiscal year to 52.8 billion yuan from a previous estimate of 44.1 billion yuan.
In the budget announced this year, there are the following core points:
As house prices in Canada soar, so does the cost of down payments, which is a major obstacle for many people, especially young people.
To help Canadians buy their first home, the government is launching a new tax-free first housing savings account, a proposal estimated to cost C $725 million. The account will allow Canadians under the age of 40 to save up to C $40000 for their first suite.
The 2022 Budget (Budget2022) plans to introduce a tax-free first Suite savings account (First Home Savings Account) to enable first-time buyers to save up to 40, 000 yuan. Like RRSP, contributions are tax-free, and withdrawals for the purchase of the first suite (including investment income) will be tax-free, just like TFSA.
To make it easier for people to buy first homes, the federal government has introduced an incentive program for first-time buyers, which allows eligible first-time buyers to reduce their borrowing costs by sharing the cost of buying with the government.
The 2022 budget announced the extension of incentives for first-time home buyers until March 31, 2025, and the government is exploring options to make the program more flexible and responsive to the needs of first-time buyers, including single-type families.
The government also plans to double the tax credit for first-time buyers to help address high transaction costs.
In order to ensure that housing is owned by Canadians and not foreign investors, the 2022 budget announced that the Government intends to introduce restrictions to prohibit foreign commercial enterprises and non-Canadian citizens or non-permanent residents from acquiring non-entertainment residential properties in Canada for a period of two years.
The new ban on foreign buyers will apply to all Condo, apartment buildings and detached residential units. However, permanent residents, foreign workers and international students will be excluded from the new measure. Foreigners who buy their own homes in Canada will also be exempted.
Resale, that is, buying a house and selling it at a much higher price than previously paid in the short term, may unfairly lead to a rise in house prices, and some people engaged in resale may not truthfully declare profits to pay less tax.
The budget proposes new rules in 2022 that anyone who sells properties held for less than 12 months will be fully taxed as business income, which applies to homes sold on and after January 1, 2023.
Canadians who sell their homes due to certain life conditions (such as death, disability, birth of a child, new job or divorce) are exempted.
Next year, the government will work with provinces and regions to formulate and implement the Home buyers’ Bill of Rights and put forward a national plan to end blind bidding.
In addition, the Home buyers’ Bill of Rights (Home Buyers’ Bill of Rights) may also include ensuring the legal right to inspect houses and ensuring transparency in the history of sales prices in the search for property rights.
The budget plans to provide 475 million yuan in 2022-23, an one-time payment of 500 yuan to those facing housing affordability challenges. Details and delivery methods will be announced later.
The budget proposes to double the tax credit for first-time buyers to C $10, 000, providing direct support of up to $1500 for first-time buyers, which applies to homes purchased on or after January 1, 2022.
The budget plans to double the eligible spending ceiling for the household accessibility tax credit to 20,000 yuan in 2022 and subsequent tax years. This means that renovations or alterations will give tax credits of up to 3000 yuan, double the previous tax credit of 1500 yuan.
The Canadian Federal Government plans to provide dental care to Canadians whose annual household income is less than C $90000 within five years. It will be implemented only for children under the age of 12 in 2022, will be extended to children under the age of 18, the elderly and people with disabilities by 2023, and will be fully implemented by 2025.
The current rule is limited to children in families earning less than C $90000 a year. For families earning less than C $70000, there is no need to pay co-payments. It is estimated that it will cost C $5.3 billion over five years.
The budget states that the government will invest C $30 billion over five years to establish a nationwide child care system. By the end of 2022, child care fees will be reduced by an average of 50 per cent; by 2025-26, the average cost of child care in all regulated nurseries in Canada will reach C $10 per day.
Canada will provide benefits of up to C $6833 per child this year and has lifted 435000 children out of poverty since 2015.
The budget states that a minimum hourly wage of $15.55 will be established. It will also extend the Canadian Workers’ benefit (CWB), which is expected to support 1 million Canadians, and workers with a full-time minimum wage may earn an additional C $1000 a year.