Aerial views of housing in Calgary. File photo by THE CANADIAN PRESS

Federal Liberals’ plan to help first-time homebuyers to kick in weeks before election

Ottawa to pick up 5% of a mortgage on existing homes for households that earn under $120,000 a year

A new federal program aiming to give homebuyers some help covering their mortgage costs will kick in on Labour Day — weeks before a federal election — with the first payments flowing in early November, just days after voters across Canada go to the polls.

The Liberals unveiled details Monday of the $1.25-billion plan, which will see the government take an equity stake in thousands of homes to ease mortgage costs for qualified buyers.

The rules of the program would allow previous homeowners to qualify under certain conditions, permit the purchase of a building with up to four units, and help with a maximum purchase price of $565,000, based on government calculations.

The program will begin taking applications on Sept. 2, days before what is expected to be the official start of a federal election campaign where the cost of living — including housing affordability — is shaping up as a central issue.

The first payments would flow on Nov. 1, two weeks after election day on Oct. 21.

Government officials said Sept. 2 was the earliest possible start date, while the minister in charge brushed off the suggestion that the governing Liberals hope to use the launch date for partisan gains.

“If we look at what we’ve done since Day 1, housing investments have been key in all four federal budgets since 2016,” Social Development Minister Jean-Yves Duclos said in an interview.

READ MORE: CMHC defends mortgage stress test changes amid calls for loosening rules

“Every one of the federal budgets in those four years has included significant measures around housing affordability and, look, we’ll continue to do so. We’re not going to be stopped because there is an election coming.”

The first-come, first-served program will see federal funds pick up five per cent of a mortgage on existing homes for households that earn under $120,000 a year, on a mortgage of no more than $480,000. The value increases to up to 10 per cent for new homes to spur construction and expand supply to avoid heating housing prices.

There isn’t any interest on the money, but a buyer would have to repay it in full when they sell their house or after 25 years of living in the home. An early repayment carries no penalties.

If the value of the home goes up, so too does the amount of money owed to federal coffers. The opposite will be the case if the value of a home goes down.

Federal officials said there isn’t a specific policy on what to do with any profits — some organizations that already provide these “shared-equity mortgages” use windfalls to expand their offerings — so the extra cash will for now flow back into the government’s general revenue pool.

The officials provided the information during a briefing for reporters on the condition that they not be identified by name.

The government estimates that some 100,000 new buyers could be helped by the program. Depending on the interest for it, the next government could be forced into a decision: increase spending at risk of boosting demand and heating prices, or stand pat and exclude buyers.

Jordan Press, The Canadian Press

Like us on Facebook and follow us on Twitter

Just Posted

Our community news matters

Guest editorial by Arnold Malone

The GoPro that refused to drown

A snorkler found a submerged GoPro and used the camera footage to find the owners

Shuswap Indian Band supports students, voices concerns for families

Shuwap Indian Band collaborates with school district on crafts, workbooks, worksheets and contests

Group home offers solace through pandemic

Rolf Heer says “life is good” at Columbia Garden Village

Kelowna man charged with harming a hamster

The 20-year-old Kelowna man faces several animal cruelty charges

High tech fish transport system set up to ‘whoosh’ salmon past Big Bar landslide

Fish will spend roughly 20 seconds inside the system, moving at roughly 20 metres per second

Trudeau to seek 10 days of paid sick leave for Canadian workers, says talks are ongoing

Paid sick leave is key to keeping COVID-19 spread under control, prime minister says

Snowbirds jets will not be leaving Kamloops, just yet

The Snowbirds have been in Kamloops since May 17 when a plane crashed killing Capt. Jennifer Casey

Introducing the West Coast Traveller: A voyage of the mind

Top armchair travel content for Alaska, Yukon, BC, Alberta, Washington, Oregon and California!

COVID-19 checkpoints ‘up to them,’ Bonnie Henry says of remote B.C. villages

Support local tourism economy, but only if you’re invited in

Vancouver Island hasn’t seen a new homegrown case of COVID-19 in two weeks

Island’s low and steady transmission rate chalked up to several factors

Eight people arrested in Victoria homeless camp after enforcement order issued

Those living in tents were given until May 20 to move indoors

Most Read