Conservative Party outlines plan to make Canadian real estate more affordable

Canada's Conservative Party leader Erin O'Toole speaks at the Westin hotel after Liberal Prime Minister Justin Trudeau called an early election, in Ottawa, Ontario, Canada August 15, 2021.  REUTERS/Lars Hagberg
Canada's Conservative Party leader Erin O'Toole speaks at the Westin hotel after Liberal leader Justin Trudeau called an early election, in Ottawa, Ontario, Canada August 15, 2021. REUTERS/Lars Hagberg

The Conservative Party of Canada is kicking off the election campaign with a platform that includes tackling housing affordability through a three-pronged approach.

One of the reasons for soaring prices experts often cite is a lack of available supply. The Conservatives say they will build a million homes in the next three years if elected.

"It's time to face the fact: We have a housing crisis in Canada. Affording a home - to rent, let alone to buy - is slipping out of reach of Canadians across our country. The primary cause is that supply simply isn't keeping up with demand," reads the Conservative platform.

"Governments have not let Canadians build enough housing to keep up with our growing population."

The party says it will do this by leveraging federal infrastructure investments, release at least 15 per cent of its real estate portfolio for housing while improving the Federal Lands Initiative, defer capital gains tax when selling a rental property and reinvesting in rental housing, explore converting unused office space to housing, work with Indigenous communities on their housing needs, and create an incentive for corporations and private landowners to donate property to Land Trusts for the development of affordable housing.

Also See: The latest real estate news for housing prices, mortgage rates, markets, luxury properties and more at Yahoo Finance Canada.

Tackling money laundering and foreign investors

The party also pledges to root out what it calls corrupt activities that drove up real estate prices. That includes tackling money laundering by making changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Fintrac, law enforcement and prosecutors would get the tools to stop and prosecute money launderers.

It says it would also establish a federal Beneficial Ownership Registry for residential property and closely examine the findings and recommendations of the Commission of Inquiry into Money Laundering in British Columbia.

"To arrest and reverse the inflationary impacts of foreign buyers and speculation in the housing market, we will ensure that housing in Canada is truly for Canadian citizens and residents first," said the Conservatives.

"The Liberals are on record stating, 'we're a very safe market for foreign investment but we're not a great market for Canadians looking for choices around housing.’ This must change."

There would also be new rules for foreign ownership. It would be banned for investors not living in or moving to Canada. Such people would be barred from buying homes here for a two-year period, after which the ban would be reviewed. The party says it would encourage foreign investment in affordable, purpose-built rental housing.

Making mortgages more affordable

The party also says it plans to make mortgages more affordable through a number of changes, including seven to 10-year mortgages for more stability for first-time buyers, and reducing the need for mortgage stress tests. It wants to do away with a stress test on mortgage renewal with another lender to increase competition.

Because so many homes in markets like Ontario and B.C. are above a million dollars, buyers need at least a 20 per cent downpayment. The Conservatives want to reduce that in high-priced markets.

They want to alter the stress test in favour of small business owners, contractors, and other non-permanent employees, including casual workers.

The party adds that it won't make changes to taxation on the sale of a primary residence.

"Canada's Conservatives will never tax Canadians' capital gains on the sale of their principal residence, something many within the Liberal Party are threatening to do."

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

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