Does the 2022 federal budget help make housing more affordable?
Submitted to Affordable housing
Choi provides a helpful analysis of the new federal housing programs, including:
• Tax-Free First Home Savings Account (FHSA). Available next year, that savings account will let you save $40,000 tax free…with a yearly contribution limit of $8,000. The advantage is the FHSA is tax-free, and it lowers your taxable income. If you contribute $5,000 to your account, your taxable income for the year is reduced by $5,000. While a positive move, this will not make housing more affordable.
• Home Buyers’ Tax Credit (HBTC) extension. The current HBTC gives a first-time home buyer a one-time $750 tax reduction. Under the new budget, the HBTC doubles to $10,000, so the maximum non-refundable credit will be $1,500. Let’s be real, an additional $1,500 isn’t going to move the needle. Also, if you don’t owe income tax the year you buy your home, you don’t get anything since the HBTC is a non-refundable tax credit.
Choi also reviews the ban on foreign investments and new taxes on house flippers and assignment sales, which he claims won’t go far to resolve the affordable housing issue.
Do you plan to take advantage of these programs? What other ways could help you and your family buy a home?
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