Department of Finance of Canada

06/11/2024 | Press release | Distributed by Public on 06/11/2024 07:25

Budget 2024: Building 4 million homes, protecting renters, and making it easier to buy a home

Budget 2024: Building 4 million homes, protecting renters, and making it easier to buy a home

From: Department of Finance Canada

News release

Budget 2024 is seizing the opportunities of today to build a Canada that works better for every generation.

Government moving forward with 30 year mortgages

June 11, 2024 - Ottawa, Ontario - Department of Finance Canada

Budget 2024 is seizing the opportunities of today to build a Canada that works better for every generation.

First, the government is delivering fairness for every generation with a housing plan that includes nearly 4 million new homes, transformative expansions to Canada's social safety net to make life cost less and ensure Canadians get the care they need, and investments to create good jobs and economic growth. The government's plan for tax fairness makes these investments in housing and younger generations possible by increasing capital gains taxes on 0.13 per cent of Canadians, in any given year.

Second, Budget 2024 is protecting renters' rights and helping more renters become homeowners. The new Canadian Renters' Bill of Rights, to be developed and implemented in partnership with provinces and territories, will protect renters from unfair practices, make leases simpler, and increase price transparency. In addition to protections from bad landlords, renters deserve credit for their on-time rent payments, which will make it easier to qualify for a mortgage, and even at a lower rate. That's why the government is calling on banks, fintechs, and credit bureaus to prioritize launching tools to allow renters to opt-in to reporting their rent payment history to unlock pathways for more renters to become homeowners.

Third, Budget 2024 is making it easier to buy a first home with up to 30 year mortgages on new builds. To restore generational fairness to the housing market for younger Canadians, starting August 1, 2024, the strengthened Canadian Mortgage Charter will allow up to 30 year mortgage amortizations for first-time home buyers purchasing new builds. To enable lenders to offer 30 year mortgages, the government is today releasing a technical backgrounder outlining eligibility parameters. Combined with the Tax-Free First Home Savings Account to save for a down payment faster and helping renters build their credit score with their on-time rental payment history, first-time buyers will now have an additional 5 years to pay off their mortgage, resulting in lower monthly payments-allowing more young Canadians to unlock the door to their first home, while also encouraging more new supply.

Through Budget 2024, the federal government is building a fairer Canada, where every generation can reach their full potential-including buying a home of their own. It is making Canada's tax system fairer by asking the very wealthiest to pay their fair share-so that we can make investments in prosperity for every generation.

Quotes

"Canadians work hard to be able to afford a home, but the costs of a downpayment and a high monthly mortgage payment put homeownership out of reach for too many people, especially Millennials and Gen Z. First-time home buyers, especially younger Canadians, are often pushed out of the housing market due to the high costs. By extending mortgage amortizations to 30 years for first-time buyers on new builds, we are helping generational fairness in the housing market for younger Canadians."

- The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance

"Canada can and will solve the housing crisis, and we're going to do it by getting every home builder, not-for-profit, mayor, city councillor, and premier pulling in the same direction to build the homes Canadians need. This is about making sure every young person has the same opportunity to rent or own a place of their own as every generation that came before them, and this housing plan is how we are going to do it."

- The Honourable Sean Fraser, Minister of Housing, Infrastructure and Communities

"The Public Lands for Homes Plan builds on our commitment to make housing affordable for all Canadians. We're continuing to accelerate the process of leveraging surplus federal properties into housing and enabling the construction of additional housing units across the country. In doing so, we will restore the promise of Canada, where every generation can afford a place to call home."

- The Honourable Jean-Yves Duclos, Minister of Public Services and Procurement

Quick facts

  • Today, the government is releasing parameters for lenders to enable them to offer 30 year mortgage amortizations for first-time buyers of new builds, starting August 1, 2024.

  • The federal government's ambitious plan to unlock nearly 4 million more homes is bringing down the costs of construction, encouraging cities to cut red tape to make it easier to build homes at a faster pace, turbocharging new innovative construction methods, and growing the construction workforce. This plan includes:

    • A Public Lands for Homes Plan to lead a national effort to build affordable housing on federal, provincial, territorial, and municipal lands across the country. We will partner with homebuilders and housing providers to build homes on every possible site across the public portfolio and ensure long-term affordability.
    • $15 billion in additional loans for the Apartment Construction Loan Program to build a minimum of 30,000 new rental apartments, in big cities, small towns, and rural communities alike. With this additional financing, the program is on track to build over 131,000 new apartments by 2031-32.
    • Launching Canada Builds, a Team Canada approach to building affordable homes for the middle class on under-utilized lands across the country. Canada Builds combines federal low-cost loans with provincial and territorial investments to scale up construction on rental homes for the middle class, from coast to coast to coast.
    • Supporting Indigenous Peoples in urban, rural, and northern areas. We will also provide additional distinctions-based investments for Indigenous housing to be delivered by Indigenous governments, organizations, housing, and service providers.
  • As strengthened in Budget 2024, the Canadian Mortgage Charter sets out the following expectations of financial institutions to ensure Canadians in mortgage hardship have access to tailored relief and make it easier to buy a first home:

    • Proactively contacting homeowners well in advance of their mortgage renewal to inform them of their renewal and refinancing options (e.g., in some circumstances, lenders should contact borrowers at least 24 months in advance to begin discussing options).
    • Allowing temporary extensions of the amortization period for mortgage holders at risk and, where appropriate, permanent amortization extensions for those that meet additional criteria set by mortgage insurers and lenders.
    • Providing information about additional interest that mortgage holders will pay, over the total length of the mortgage, as a result of amortization extensions.
    • Waiving fees and costs that would have otherwise been charged for relief measures, or when mortgage holders take action (e.g., increasing payments) to reduce an extended amortization as their financial situation improves.
    • Not requiring insured mortgage holders to requalify under the insured minimum qualifying rate when switching lenders at mortgage renewal.
    • Giving borrowers at risk the ability to make lump sum payments to avoid negative amortization or sell their principal residence without any prepayment penalties.
    • Not charging interest on interest in the event that mortgage relief measures result in a temporary period of negative amortization.
    • Calling on landlords, banks, credit bureaus, and fintech companies to make sure that renters can opt-in to reporting their on-time rent payment history to be taken into account in their credit score.
    • Permitting up to 30 year mortgage amortization for first-time buyers purchasing new builds.

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Contacts

Media may contact:

Katherine Cuplinskas
Press Secretary and Senior Communications Advisor
Office of the Deputy Prime Minister and Minister of Finance
[email protected]

Media Relations
Department of Finance Canada
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613-369-4000

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