How to Save Thousands with Federal Budget 2023?
The Canadian Federal Budget 2023 just got announced and there are some very interesting bits in here to examine! As we continue to battle inflation, the government faced the complex and challenging task of creating a budget that balances the need for economic growth with the realities of the current financial climate.
Our goal is to break down this complex topic into digestible bite-sized information and examine how the budget will affect people’s personal lives and the housing market as a whole. Whether you’re a first-time homebuyer or a seasoned real estate investor, we hope this blog post will provide valuable insights into the impact of the federal budget on the Canadian housing market.
The Good Bits
Let’s start with the good news. The new mortgage code of conduct promises to be handy for Canadians facing financial difficulties. This measure ensures that federally regulated financial institutions provide fair and equitable access to mortgage relief measures for those struggling to stay in their homes due to elevated interest rates.
The code protects people from unnecessary penalties, internal bank fees, or interest charges and allows them to extend amortizations beyond 25 years, adjust payment schedules, and make lump-sum payments. This is a step in the right direction to help Canadians stay in their homes during tough financial times.
From last year’s budget, we can see that the government implemented a tax-free savings account for first-time homebuyers. This Tax-Free First Home Savings Account, announced in the 2022 budget, will officially launch on April 1, with investment companies expected to start offering these accounts in the following weeks and months. While these accounts are a must for people saving to buy a home, it’s important to note that they do nothing to bridge the gap between income levels and home prices.
Other things echoed from last year’s budget are the two-year ban on non-residents purchasing residential properties, and the $4-billion Housing Accelerator Fund. This fund aims to create at least 100,000 net new homes, which will be a significant boost for the housing market.
The Grocery Rebate
As we continue to battle the rising cost of living, we cannot ignore the impact it has on our daily necessities, such as food. With the cost of groceries rising by 10.6% year over year last month, according to Statistics Canada, the federal government has proposed a new one-time “grocery rebate” in the latest budget.
This rebate, offered through the GST tax credit system, would make approximately 11 million low- and modest-income Canadians eligible. The rebate would provide eligible couples with two children up to $467, while seniors could receive $225 and single individuals could receive $234. While this rebate offers some financial relief, it is important to note that it is a small, one-time cash transfer in a budget that lacks enhancements to other income supports.
A Little Respite For Students
Budget 2023 has taken a significant step towards making post-secondary education more accessible and affordable for students in Canada. The proposed measures aim to help students pay off their debt and ease the transition from school to working life, acknowledging that the higher cost of living still makes education challenging to afford.
The budget outlines plans to increase Canada Student Grants by 40%, offering up to $4,200 for full-time students. It also includes raising the Canada Student Loan limit from $210 to $300 weekly, and waiving the credit screening requirement for mature students (22 years or older) to qualify for grants and loans for the first time. These measures provide much-needed financial assistance to students and help reduce the burden of debt.
The Not-So-Good Bits
Despite the positive aspects of the 2023 federal budget, some concerns need to be addressed. One of the most significant criticisms comes from the lack of support for housing supply and how the budget addressed corporate investors. Housing policy experts argue that the government is not meaningfully investing in rentals and is not doing enough to bridge the affordability gap for first-time homebuyers.
The budget acknowledges that large corporate investors own a significant share of Canada’s rental units, which contributes to rising housing costs. However, it does not provide any concrete measures to address the issue. Instead, experts suggest that if corporate investors can create more housing, they should be allowed to solve the problem where the government cannot. While this may be a short-term solution, there needs to be a more comprehensive plan to address the housing affordability crisis in the long term.
The Takeaway
In conclusion, the Federal Budget 2023 has both positive and negative implications for Canadians. While measures such as the mortgage code of conduct, the Housing Accelerator Fund, and the grocery rebate offer some respite to struggling Canadians, there are concerns about the lack of support for housing supply and corporate investors.
If you’re a first-time homebuyer or a seasoned real estate investor, it’s important to stay informed about the impact of the federal budget on the housing market. At ipresalecondos, we offer a comprehensive range of services to guide you through your real estate journey from start to finish. Our website provides up-to-date information about new development projects and pre-construction condos, making it easier for you to find the right property for your needs. Contact us today to learn more about how we can help you navigate the ever-changing real estate market.
