Unlocking Homeownership Dreams in Canada: New Opportunities for Newcomers and Locals
The Canadian government eases property purchase restrictions and introduces a tax-free savings plan for first-time homebuyers, creating a more accessible housing market.
Are you dreaming of owning a home in Canada? I have fantastic news for you! The Canadian government has recently made significant changes that make it easier for both newcomers and locals to purchase a home in the country, providing a welcoming environment and opening up new opportunities in the housing market.
Last week, the government announced that they're softening restrictions on an Act that previously created barriers for non-Canadians to purchase residential property. Moreover, as of April 1st, financial institutions can now offer Tax-Free First Home Savings Accounts (FHSA) as part of the government's commitment made in Budget 2022.
Expanded Opportunities for Non-Canadian Homebuyers
The Canada Mortgage and Housing Corporation (CMHC) recently revealed amendments to the Prohibition on the Purchase of Residential Property by Non-Canadians Act. This change has created a more inclusive environment for homebuyers in Canada on a work permit, allowing them to purchase mixed-use residential and commercial land under specific criteria.
Eligible work permit holders must have at least 183 days of validity remaining on their work permit or work authorization when purchasing a property, and they must not have previously bought more than one residential property in Canada. These amendments have been effective since the day of the announcement.
Moreover, non-Canadians can now purchase vacant land zoned for residential and mixed-use, allowing them to use the land for any purpose, including residential development.
Simplified Homeownership Process: No More Proof of Tax Filings
The government has also repealed the provisions concerning tax filings and previous work experience in Canada. This change further streamlines the process for temporary residents, making it easier to buy a home in Canada and settle into a new life.
Introducing the First Home Savings Account: A Pathway to Affordable Homeownership
Starting April 1st, 2023, financial institutions can offer the Tax-Free First Home Savings Account (FHSA) to Canadians. This plan allows prospective first-time homebuyers to save up to $40,000 on a tax-free basis, with an annual maximum contribution of $8,000. Contributions are tax-deductible, and withdrawals for purchasing a first home are non-taxable, similar to a Tax-Free Savings Account.
The Canadian government expects the FHSA to provide $725 million in support over the next five years, ultimately making housing more affordable for Canadians.
To qualify for an FHSA, participants must be a Canadian resident, 18 years or older, and a first-time homebuyer. The account may remain open for 15 years or until specific conditions are met.
A Snapshot of the Current State of Housing Prices in Canada
According to the Canadian Real Estate Association (CREA), the national average home price was $662,437 in February 2023, down 18.9% from the all-time high in February 2022. The national average home price is forecasted to decline by 5.9% annually in 2023.
In conclusion, the Canadian government's recent changes have made it significantly easier for newcomers and locals to purchase a home in the country. If you're considering homeownership in Canada, now is the perfect time to take advantage of these exciting new opportunities and secure a place to call your own. Don't forget to explore your options, research the housing market, and consult with a professional to make your dream of owning a home a reality.