With the federal election officially under way, Prime Minister Stephen Harper unveiled a pledge Wednesday to hike the Home Buyers’ Plan withdrawal limit from $25,000 to $35,000 if re-elected.
“For many Canadians, owning a home is their most important investment and the achievement of a key life goal,” said Prime Minister Harper in a press release. “We want to help more Canadian families purchase their first dream home.”
The Home Buyers’ Plan, introduced in 1992, lets Canadians tap into their Registered Retirement Savings Plans (RRSPs) tax-free, on a repayable basis, to help fund the purchase or construction of their first home. The Harper government previously raised the withdrawal limit from $20,000 to $25,000 in 2009.
The Canadian Real Estate Association (CREA) publicly applauded the move in a press release issued the same day. It comes as no surprise, given that CREA’s realtor members advocated the original plan.
The association pointed to the plan’s success in helping 2.8 million Canadian attain home ownership since 1992, but added that a hike is needed to maintain the value of the withdrawal limit against inflation.
“The Home Buyer’s Plan has helped so many Canadian families realize their dream of home ownership,” said CREA president Pauline Aunger. “Today’s commitment to increase the withdrawal limit of the HBP will ensure that the dream stays within reach for today’s young people.”
In his announcement Wednesday, Prime Minister Harper also addressed concerns over the perceived presence of speculative foreign buyers in the Canadian housing market, particularly in Toronto and Vancouver, and their impact on housing affordability and availability. He committed to collecting comprehensive data on this activity and coordinating with the provinces to take action as necessary to curb it.