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

Lightning causes three wildfires east of Osoyoos

It is believed the fires started by a lightning storm

UPDATE: Second collision on Highway 1 west of Salmon Arm now clear

Emergency crews respond to motor-vehicle collision near Second Nations Road intersection

CSRD to seek public assent to borrow $1.77 million for park purchase

Formal opposition from 10 per cent of electors required to halt loan

Air ambulance called to Highway 1 crash near Tappen

The collision happened about 3:30 p.m. by James Road

Food trucks feed festivalgoers’ want for unique dining experience

Roots and Blues returns with variety of vendors, continues with recycle and compost program

Video: Crowd thrilled at S-Games in Sicamous

The celebration of two-wheeled transportation showed off daring athletes on all kinds of bikes.

Lightning causes three wildfires east of Osoyoos

It is believed the fires started by a lightning storm

Backhoe ‘burned to a crisp’ in South Okanagan

South Okanagan fire chief said the situation could have been a lot worse

Our history in pictures: The Ireland residence

According Salmon Arm Museum records, this image was taken in front of… Continue reading

VIDEO: Man found dead near B.C. teens’ truck could be linked to a double homicide

RCMP said they are looking for Kam McLeod, 19, and Bryer Schmegelsky, 18, of Port Alberni

Kelowna cab driver charged with sexual assault

RCMP received a report May 28 alleging a taxi passenger had been sexually assaulted by a cab driver

Letter: Make CSRD directors’ term limit subject to alternative approval process

Writer upset by regional district’s recent “money pit” proposals

Latest plan is to fly trapped fish by helicopter over Big Bar slide

Multi-pronged plan set in motion to freesalmon blocked by landslide in the Fraser River

Controversial anti-abortion film to be screened in the South Okanagan

Unplanned will be shown at the Penticton Landmark theatre

Most Read