“I understand what they’re doing here but, to me, if they could give first-time homebuyers a break on some of the carrying costs … if I had my way, maybe give them a break on the first year on electricity, give them a break on home or condo taxes for the first couple years so that the carrying costs are lessened and therefore their cash flows better and it makes home owning more affordable,” Bill Whyte, SVP and chief of member experience at Meridian Credit Union, told MortgageBrokerNews.ca. “While this is a one-time thing for homebuyers, but if they were able to do something along those lines … I think that could actually have a greater impact.”
The Ontario government announced Monday it was doubling the rebate on the land-transfer tax for first-time homebuyers to $4,000.
It said half of first-time buyers won’t pay the tax in the province.
At the same time, Ontario announced it was increasing the tax on luxury homes that sell for over $2 million.
And while the rebate for first-timers is welcome, Whyte believes the government should focus on carrying costs as opposed to initial costs if it wants to make it easier for Ontarians to get into the market.
“In the scheme of the things, it’s small to be frank; but it’s something. You don’t want to look a gift horse in the month,” he said. “Now, first-time homebuyers can actually buy a home and won’t have to pay any tax up to almost $400,000, so it’s something. It doesn’t help them with the carrying cost.
“You can put it toward household expenses or savings or anything else. It’s a small thing in my mind in the total scheme of things.”
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Following Ontario’s announced first-time homebuyer tax break, one professional is arguing in favour of a different kind of policy.