Northern Light
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Today in campaign news, the Libs ask the question "Why shoot yourself in the head, when you can nail both feet and one knee?"
www.theglobeandmail.com
The article above elucidates on a new Liberal campaign promise to address housing after seeing this play well for the Tories and the NDP.
At first blush, the centrepiece is a new tax-free savings account (because the tax system isn't complex enough) which will allow one to save for a downpayment tax-free.
So.....I'm already muttering to myself:
- If it did what you hoped, it would actually spike demand, while doing nothing to address supply, and would make the housing situation worse.
- But, it won't do much at all, because if you had 'x' set aside for a down payment in a low-risk investment, such as a bank account, or bond or a GIC or moneymarket fund, you'd be lucky to see a 3% yield.
The return sum, if you paid the sticker income tax on it wouldn't amount of even a few thousand dollars over say, 10 years; which when compared with purchase prices is less than a rounding error.
- Then, however, I looked at the details, and I see they propose to cap the savings at 40K, which would be less than a 5% down payment on most Toronto homes; and also means the tax benefit is even smaller; never
mind that you could already put that money away in a regular TFSA or a host of other investment vehicles, some tax-sheltered.
The average voter won't necessarily get all the policy-wonk stuff. But the ones who are millennials anxious to break into the housing market will understand this much........it doesn't solve their problem.
Liberals pledge billions for housing, join Conservatives in proposing foreign home-buyer ban
Plan also pledges a $1-billion program to increase rent-to-own projects and promises to end blind bidding on homes as housing affordability becomes key election issue
www.theglobeandmail.com
The article above elucidates on a new Liberal campaign promise to address housing after seeing this play well for the Tories and the NDP.
At first blush, the centrepiece is a new tax-free savings account (because the tax system isn't complex enough) which will allow one to save for a downpayment tax-free.
So.....I'm already muttering to myself:
- If it did what you hoped, it would actually spike demand, while doing nothing to address supply, and would make the housing situation worse.
- But, it won't do much at all, because if you had 'x' set aside for a down payment in a low-risk investment, such as a bank account, or bond or a GIC or moneymarket fund, you'd be lucky to see a 3% yield.
The return sum, if you paid the sticker income tax on it wouldn't amount of even a few thousand dollars over say, 10 years; which when compared with purchase prices is less than a rounding error.
- Then, however, I looked at the details, and I see they propose to cap the savings at 40K, which would be less than a 5% down payment on most Toronto homes; and also means the tax benefit is even smaller; never
mind that you could already put that money away in a regular TFSA or a host of other investment vehicles, some tax-sheltered.
The average voter won't necessarily get all the policy-wonk stuff. But the ones who are millennials anxious to break into the housing market will understand this much........it doesn't solve their problem.
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Evaluate the party platforms through this question, asked by @JohnPasalis: 'does the party platform on housing encourage more supply for Canadians looking to treat their homes like a home rather than an asset?'