Once a year REALTORS® from across the country converge on Ottawa to meet with their MPs on matters to help Canadians be successful in homeownership matters. The Canadian Real Estate Association (CREA) is holding PAC Days from October 16 to October 18.
Participants gain invaluable insights on the parliamentary discourse that is not always reflected in media coverage and on issues which may be long-term in nature but critical to the future economic outlook of Canadians.
What does this all mean for Canadians and their hopes and dreams when it comes to buying and selling a home?
The Home Buyers Plan (HBP), for example, was highlighted in an infographic piece that showed 2.9-million Canadians have used the plan since it was introduced in 1992. It indicated that in 2016, there was $2.6 billion generated in economic spin-off spending and over 18,200 jobs created as a result of HBP transactions.
Realtors are asking MPs to index the HBP to the Consumer Price Index in $2,500 increments to ensure it does not lose its purchasing power in order to make homeownership more affordable and within reach of first-time buyers.
In spite of the HBP’s highly instrumental role in helping many Canadians buy a home, it has lost over $5,500 in purchasing power since 1992, and over $2,700 since it was last adjusted in 2009.
Currently, an individual can use up to $25,000 in their RRSPs to purchase a home, which must be paid back in 15 years. For some potential buyers, the HBP is the difference between buying or not buying. For others, the HBP allows them to make a larger down payment and reduce or avoid mortgage default insurance fees. It also allows them to build equity more quickly.
Another issue raised was opening the door more to access the HBP. Presently, it is limited to first-time buyers, those who have not owned a home for five years and Canadians with disabilities. The proposal is to allow Canadians to use HBP if they relocate for a job, suffer the loss of a spouse or a marital breakdown, or need to accommodate and look after an elderly family member.
Part of the rationale behind the proposal for a job change is to facilitate more labour mobility and not make the price of housing a barrier to job relocation. Unlike costly tax credits, extension of the HBP amounts to a zero-interest self-loan. It allows Canadians to borrow from their own savings rather than depend on government programs.
This proposal was embraced by the Liberal government in their winning election platform. They understand that sudden life changes can affect the ability of Canadians to maintain homeownership. The current reporting requirements in the Income Tax Act can be used to effectively facilitate and monitor the extension of the HBP to accommodate Canadians going through significant life changes.
One Liberal MP, in particular, who has embraced the importance in helping Canadians attain their dream of homeownership from both an individual and community perspective, is Winnipeg North MP Kevin Lamoureux. He has taken it upon himself to introduce in the House of Commons a petition calling on the federal government to support both indexing the HBP and allowing more flexibility in accommodating sudden life changes.
In fact, Lamoureux was able to introduce this HBP petition while Realtors were seeking support from their MPs, which
can only add to the impetus for bringing about these helpful HBP changes.
Kudos is also in order to local Realtor Kourosh Doustshenas, who has been very active in getting broad public support by obtaining petition signatures. Doustshenas was one of the WinnipegREALTORS® delegates in Ottawa during PAC Days and held a very positive meeting with MP Lamoureux.
CREA was pleased to see Doustshenas take the initiative to bring more positive attention to all MPs on making the HBP more effective in its purchasing power and its availability to Canadians in