Finance Minister Bill Morneau tabled the Government of Canada’s Budget 2019 yesterday, and there was an emphasis on improving housing affordability for first-time buyers. 

Leading up to the announcement of the Budget details, there was a lot of speculation and recommendations from real estate and home building professionals. Some were calling for the mortgage stress test to be dialed back or eliminated. Others wanted to see an insured 30-year mortgage amortization. 

It was recommended that perhaps increasing the amount you can withdraw from your RRSPs (Home Buyer’s Plan) would help would-be buyers afford a home purchase. There was also a lot of support behind increasing the First-Time Home Buyers Tax Credit, which allows first-time buyers to claim $5,000 of their down payment, leading to $750 in tax relief. 

A survey by Zoocasa found that increasing the tax credit was the most agreed upon solution leading up to the Budget announcement. Interestingly, only 50% of Canadians who knew about the stress test thought that reducing it would help with affordability. And only 57% of respondents actually were aware of the stress test. 

The survey also found that only 10% believed insured 30-year mortgage amortizations would be effective, and only 8% thought that increasing the RRSP withdrawal limit would help. More than 10% didn’t think any of these measures would help and 28% did not know what changes needed to be made.    

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