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

Snowfall warning for Kootenay and Paulson passes

Up to 30 cm expected in mountain passes Saturday and Sunday.

Readers’ theatre comes to Castle Wood Village

Volunteers and residents gather for a bit of fun at one of Castlegar’s senior residences.

Community Futures launches cannabis consultation program

The Cannabis Business Transition Initiative helps businesses move into the legal economy

Moose tests positive for Chronic Wasting Disease in northwest Montana

This is the first time the disease has been detected in the species in Montana

PLACE NAMES: More on the great Creston Kootenay debate

Members of the Lost Kootenays Facebook site weigh in on whether Creston is in West or East Kootenay

Teen with cancer whose viral video urged Canadians to vote has died, uncle tweets

Maddison Yetman had been looking forward to voting in her first federal election since junior high school

Rowing Canada, UVic investigate celebrated coach for harassment, abuse

Lily Copeland says she felt intimidated and trapped by Williams

Cleanup in the works after tanker truck fire leads to oil spill in B.C.’s Peace region

The province said the majority of the spilled oil likely burned away in the fire.

BC VIEWS: Action needed on healthcare workplace violence

While we’ve been talking about it, the number of B.C. victims has only grown

Closing arguments begin in B.C. case launched in 2009 over private health care

Dr. Day said he illegally opened the Cambie Surgery Centre in 1996 in order to create more operating-room time

MacLean says “Coach’s Corner is no more” following Cherry’s dismissal from Hockey Night

Cherry had singled out new immigrants in for not honouring Canada’s veterans and fallen soldiers

MacKinnon powers Avs to 5-4 OT win over Canucks

Vancouver battled back late to pick up single point

Dallas Smith, Terri Clark to perform on CP Holiday Train’s B.C. stops

Annual festive food bank fundraiser rolling across province from Dec. 11 to 17

Poole’s Land finale: Tofino’s legendary ‘hippie commune’ being dismantled

Series of land-use fines inspire owner Michael Poole to sell the roughly 20-acre property.

Most Read