2019 & 2020 Budgets & Elections will Impact Home Buyers
Here is a summary of the 2019 pre-election budget and how it impacts home buyers and investors. The Federal Election is going to result in some changes but do not expect to see much before April or may 2020 at the earliest. Denis is keeping up on the various promises and proposals. What has been effecting the real estate market in a big way in BC has been the Federal Stress Test which all parties to some extent are promising to revist. The existing restrictions have nationally had a huge impact of buyer qualifications and in some cases refinancing ptions for many. With her vast Mortgage Background Denise can answer your questions. she can always be reached at 250-248-9996 or firstname.lastname@example.org for Real Estate or Mortgage advice.
Modernizing the Home Buyers’ Plan
Currently, the plan allows first-time home owners to withdraw up to $25,000 from their RRSP to purchase or build a home, without paying withdrawal tax. The amount must be repaid over the next 15 years.
The budget proposes to increase that amount to $35,000. Furthermore, individuals who experience a breakdown in marriage or common-law partnership can participate in the plan, even if they do not meet the first-time requirement.
First Time Home Buyer Incentive
This incentive is a shared equity mortgage that would give first-time homebuyers the ability to lower their borrowing costs by sharing the cost with the Canada Mortgage and Housing Corporation.
The incentive would provide funding of 5% or 10% of the home purchase price. No ongoing monthly payments would be required - the incentive can be repaid upon selling the home for example.
Canada Training Credit
Every year, eligible workers between ages 25 and 64 would accumulate a credit of $250 per year, up to a lifetime limit of $5,000.
Starting in 2020, Canadians would be able to apply for up to half the cost of training fees at colleges, universities and eligible institutions providing occupation skills training.
Registered Disability Savings Plan Improvement
To open an RDSP, an individual must be eligible for the Disability Tax Credit (DTC). When a beneficiary no longer qualifies for the DTC, the RDSP rules can require that the plan be closed, and that grants and bonds be repaid to the Canadian Government.
To address concerns that this treatment does not appropriately recognize the financial impact that periods of severe, but episodic, disability can have on individuals, Budget 2019 proposes to eliminate the requirement to close an RDSP when a beneficiary no longer qualifies for the DTC. Doing so will allow grants and bonds that otherwise would be required to be repaid to the Government to remain in the RDSP.
Provincial Election Issues for Home owners to watch!
All parties will promise to give us back our tax dollars but the 2020 election in BC will bring changes even from the existing government. You can expect some changes in the foreign Ownership rules particularly as the effect Canadian citizens, Investment tax isanother that is effecting Canadians who maintain two homes in areas of Vancouver Island that are effected. The combined tax and fee Dollars directly or indirectly being paid on a new home , this includes permits development fees etc etc , depending on the local areas often run from $50,000.. to $90,000.. (so much for affordable housing). Something has to change so stay informed.