The federal government has rolled out tax credits meant to help families live in the same household, but are they enough to help with the housing crisis?
As of January 1, the Multi-Generation Home Renovation Tax Credit can be claimed for families building secondary suites “for family members of elderly or disabled adults.”
Prime Minister Justin Trudeau said the tax credit “will help sustain the tradition of multiple generations living together and help more Canadians find a safe and affordable place to call home.”
Introducing the Multi-Generation Home Renovation Tax Credit: You can receive up to $7,500 to add another unit to your home for a member of your family. This will preserve the tradition of multiple generations living together and help more Canadians find a safe and affordable place to call home.
— Justin Trudeau (@JustinTrudeau) January 20, 2023
According to the 2022 Budget, this is a refundable credit that families can claim 15% of “up to $50,000 in eligible renovation and construction costs incurred to build a second suite.” Rules and restrictions About eligibility for tax credits.
This move campaign promise made by the Liberal Party. Part of the liberal housing plan included a tax credit “for families who wish to add a secondary unit to their home for the purpose of allowing immediate family members or relatives to live together.”
The Liberal Party said it would “provide up to $7,500 in assistance to make communities more livable, while also bringing families closer together so they can better care for each other.”
Host Daniel Foch Canadian investor podcastcalls it the beginning of “the ‘stay home forever’ policy phase of the housing crisis.”
“Honestly, I was a bit joking about the tax credit for the prime minister’s original tweet because he used the word ‘multi-generational’ without disclosing too many details about the policy. It’s designed for millennials to live in their parent’s basement forever,” Foch tells his Daily Hive Urbanized.
“But the ‘live with my parents forever’ part of TikTok is the fact that the policy is designed for seniors (over 65) to get back together with their families and create in-law suites to age.” It could also point to – a location. “
“As a millennial homeowner, the most common utility of this credit is to help your parents move back in with you to consolidate your living expenses, avoid expensive nursing homes, and reduce home ownership costs.” That’s it.”
According to Statistics Canada, extended family It is on the rise. By 2021, nearly 1 million households will be “made up of multi-generational families,” representing his 7% of all households.
“I think multi-generational living can be beautiful for many people, especially older people who want to grow old on the spot and who don’t have time to benefit from having family by their side to help them with their daily routines.” Even more so for millennials,” Foch said.
“We have seen this way of life in many cultures and regions of the world, gracefully and naturally. is a little behind, and the timing has set some red flags for me,” he said.
According to Statistics Canada, there are a significant number of young people living with their parents, but that number is starting to plateau.
“From 2016 to 2021, the proportion of young people aged 20 to 34 living in the same household with at least one parent remained unchanged (35%).
“However, the age composition of young adults living with their parents continues to shift toward older age. He was 34 years old,” Statistics Canada said.
The new multigenerational housing tax credit is just one of them. many updates From the federal government to address the affordability of Canadian housing. Other initiatives include:
According to Foch, the challenges we face are many and still need to be addressed.
“This is seemingly a policy designed to create household consolidation, resulting in less household formation and thus less demand. We aim to reduce it,” he said.
“This kind of policy shows that Canada may ultimately be moving toward a less-owner housing model as more people are alienated from property. Unless things change, it really shows that the Canadian dream of home ownership is beginning to come to an end,” he said.
What are your thoughts on this tax credit?