Federal Budget 2022: Real Estate Highlights

On April 7, 2022, Finance Minister Chrystia Freeland introduced the 2022 Federal Budget (the “Budget”). Included in the Budget are the following real estate related measures:

1. Two-Year Ban on Foreign Homebuyers.  The Budget contemplates new rules to prohibit foreign commercial enterprises and individuals who are not Canadian citizens or permanent residents from acquiring residential property in Canada for two years. Notably, refugees, foreign workers and international students on the path to permanent residency are expected to be exempt.
2. First Time Homebuyers Incentives.  The Budget introduces a Tax-Free First Home Savings Account that will allow first-time homebuyers to contribute up to a maximum of $40,000. Contributions to this account would be tax-deductible like an RRSP, while withdrawals to buy a home would be non-taxable like a TFSA. In addition, the Budget doubles the existing First-Time Home Buyers' Tax Credit (from $5,000 to $10,000).