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Budget 2022

They still do exist. I love the interesting things you find when viewing older homes. This was from a 1948 vintage house on Saucier Ave.

On April 7th the Federal Government introduced the Budget 2022, with the main topic affecting Canadians this past year being the rapid increase in real estate prices. In 2022 the Feds have allocated $10.1 Billion to help with housing supply and affordability in Canada, aside from climate change and Indigenous reconciliation housing is the largest area of new spending.

The complete budget is not entirely the most riveting information for most people to read through, but as it relates to housing, it seems that is the most top of mind for everyone in Canada right now and rightfully, so it made it to Chapter 1 which consists of a total of 20 pages out of the 300-page document.

In the budget, they are using 4 different approaches to achieve more affordable housing.

  1. Building Affordable Homes

  2. Helping Canadians Buy Their First Home

  3. Protecting Buyers and Renters

  4. Curbing Foreign Investment and Speculation

It's nothing new, that housing affordability in Kelowna and for the matter, BC has been getting away from people for years before the pandemic started. The investment the government is making will hopefully speed up the city planning and zoning process to help increase the supply in the real estate market and allow first-time home buyers lower barriers to entering the housing market.

As the budget relates to real estate in BC, British Columbia Real Estate Association (BCREA) went through and released their overview of how the new commitments in the budget impact BC's real estate sector.

Below has been copied from the BCREA article.

"Housing supply

Many commitments made to increase housing supply align with BCREA's ongoing advocacy. The largest of these commitments was a new Housing Accelerator Fund, which will invest in municipal housing planning and delivery processes to speed up developments. Existing infrastructure programs will now tie infrastructure funding to actions by provincial and local governments to increase housing supply, which BCREA called for in our pre-budget submission. Additionally, more funds are being allocated to the National Co-Investment Fund, which will expand co-op housing.

There was also a commitment to launching a Multigenerational Home Renovation Tax Credit, which will allow families to claim 15 per cent (up to a $7,500 credit) in eligible renovation and construction costs incurred to construct a secondary suite for seniors or adults with disabilities.

Several proposals within the budget specifically target housing supply for Indigenous Canadians, including the initiation of an Urban, Rural and Northern Indigenous Housing Strategy.

Assistance for First-Time Homebuyers

The budget also increases much-needed incentives for first-time homebuyers, through a new Tax-Free First Home Savings Account. Beginning in 2023, it will give prospective first-time homebuyers the ability to contribute up to $40,000. Like a Registered Retirement Savings Plan (RRSP), contributions would be tax-deductible, while withdrawals to purchase a first home would be non-taxable, like a Tax-Free Savings Account (TFSA). In addition, the First Time Home Buyers' Tax Credit will be doubled to $10,000, retroactive to homes purchased on or after January 1, 2022.

Home Buyers' Bill of Rights

The budget also re-affirmed the government's commitment to introduce a Home Buyer's Bill of Rights. This would include a national plan to end "blind bidding" as well as possibly include a legal right to a home inspection and ensuring transparency on the history of sales prices on title searches. While we support the intent to protect homebuyers, independent research shows that banning "blind bidding" would likely lead to higher prices in a hot real estate market.

Reducing Foreign Demand

The budget committed to introducing legislation designed to reduce foreign demand in real estate. The legislation would prohibit non-Canadian citizens or permanent residents as well as non-Canadian commercial enterprises from acquiring non-recreational, residential property in Canada for two years. We are concerned this measure needlessly targets non-Canadians, creating barriers for attracting foreign investment, and will potentially result in reciprocal policies from other countries targeting Canadian "foreign" owners.

Other demand-side measures

In addition to targeting demand from non-Canadians, the government will also conduct a review of housing as an asset class to better understand the role of large corporate players in the market and the impact on renters and homeowners. They will also introduce legislation to introduce an "anti-flipping tax" beginning January 1, 2023.

Energy Retrofits

Another core aspect of the budget was new commitments to improve the energy efficiency of homes. These include strengthening affordability and energy efficiency requirements within the Rental Construction Financing Initiative, developing a Canada Green Buildings Strategy, creating the Deep Retrofit Accelerator Initiative and expanding tax deductions for business investments in clean energy equipment to include air-source heat pumps. These initiatives are designed to reduce Canada's greenhouse gas emissions reductions targets of 40 per cent below 2005 levels by 2030.

While there are several proposals that raise concern in Budget 2022 and require further consultation, detail and scrutiny before implementation, overall, BCREA is encouraged that the federal government is taking initial steps to tackle the country's affordability crisis."

There are definitely implications of each measure they are planning to implement. Will the implementations have the desired effect only time will tell?

Let me know if there is anything I can do for you! Have a great week and feel free to reach out with any questions!


Mark Coons



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